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[; Jamie, we're talking about the fact that you have lent into technology over the last decade. Billions of dollars invested across the business. When it comes to AI, which parts of the JP Morgan business are going to be most transformed by AI? Yeah. So, we already we've been doing AI since 2012. So, people think it's a new thing.
Gen AI is kind of new, but not all of AI. We have 2,000 people doing it. spend $2 billion a year on it. It affects everything. Risk, fraud, marketing, idea generation, customer service, and it's kind of the tip of the iceberg. And so, you know, we're deploying it. Every time we meet as a business, we ask, "What are you doing now?
What are you doing to serve your people? Why can you do better? What is somebody else doing?" So, we're freely deploying it and safely. We, you know, have a lot of rules and regulations in place, our own data and how we use it, etc. Is it having a material impact on revenues for JP Morgan? If not now, then when?
So we have shown that for that for two billion of expense we have about two billion of benefit. Some we actually can do real detail. We did this we reduced headcount that we saved this time and money. We reduced errors. Some you can't. It's just improved service. Something like that. It's like almost worthwhile worthless to say what's the MPV.
But we know about $2 billion of actual cost saves. And I like I said I think it's the tip of the iceberg. We're getting better and better at it. Uh we know how to do it. As the managers learn how to do it, they're asking more questions. Why can't it do X and why can't it do Y? And then we I don't know my phone here.
We have a suite, an LLM suite on internal data to do research and summarize reports and you know uh scan contracts and do things like that. 150,000 people a week use it. So it's it's quite productive. More and more of your employees are using your the Aentic AI. Our own our own our own LLM and Aentic is just starting you know but that will be deployed over time too but it's also being used for coding.
I mean it's it's being used quite broadly now and like I said part of it is getting your mind working around how you're going to use this thing and so our managers and leaders have to do it. If you look out 5 years are there more jobs in banking as a result of AI or fewer. I look I think it's I think people shouldn't put their head in the sand.
It is going to affect jobs. So think of every application every every service you do well you'll be using AI some to enhance it. Some of it'll be you doing the same job, you're doing a better job at it. There will be jobs that it eliminates, but you're better off being way ahead of the curve and retraining people.
So, we retrain and redeploy a lot of people. So, for JP Mor, if we're successful, we'll have more jobs, but there'll probably be less jobs in certain functions. When you look at the spend on AI, infrastructure, chips, open AI, not loss, it's not making a profit. lossmaking deals of about a trillion dollars this year.
The hypers scale is the spend there. What is your reaction when you see those numbers crossing? Are you comfortable with that kind of spend on the infrastructure around AI? It's a lot. I'm not sure it's all ever going to be totally spent. I think when you look at big tech like tech that happens like this and you go look at cars, you look at television, you look at internet, big monies got spent.
There were a lot of losers, a lot of winners. In total, it was productive. So take even take the internet bubble. remember that blew up and amount of pe I can you and I could probably name a hundred companies that you know were worth $50 billion and disappeared but out of it came Facebook, YouTube, Google you know so there will be real big companies real big success it will work in spite of the fact that not everyone who invests in it is going to have a great investment return
and of course those investments are part of what has powered this bull market in stocks and on Sunday it'll be three years of that bull market where do you think we are in that bull market is there is there any complacency there is underpinned by rational factors. Is there more momentum? Yeah, you know, look, we're in a bull market.
It's been clear asset prices are high, credit spreads are low, consumers still okay. The consumer has jobs. Remember, jobs, jobs, jobs are what usually starts to force people to cut back and change things and consumers spend less and companies cut back. So far so good. There are a lot of issues out there that, you know, the economy's got to deal with from all this geopolitical stuff.
Maybe they'll sort out well. What's going to happen to inflation? I'm a little more nervous about inflation not coming down like people expect. That might be a surprise. On the other hand, there's a lot of spending. There's a lot of government spending, which is inflationary, too, by the way. And and so I look, I don't know.
I hope for the best. Plan for the worst. And you're not worried about a recession in 2026 for the US. You made that clear. I think it could happen in 2026. I just I'm not worried about is a different statement. We'll deal with it. We'll serve our clients. We'll navigate through it. A lot of us have been through them before.
You don't wish it because you know certain people get hurt but uh but it could happen in 2026. We're still of course in the US government shutdown. But but I do think there are positives like deregulation is a real positive which also helps animal spirits is a positive and you know there in the one big beautiful bill there's also more stimulus that has positives for the economy but maybe negatives for inflation.
So how it all sorts out we'll we'll see. Markets are looking through the US government shutdown. Is there a period of time if this shutdown continues where markets start to wake up and become concerned? I don't think so. I look, I don't like shutdowns. I I think it's just a bad idea and I don't care what the Democrats, Republicans say.
It's a bad idea. It's not a way to run a railroad. I don't think it's critical. We've had I forgot the number, four or five or six. You know, one of them went for 35 days. I'm not sure anyone affect really affected the economy and the market in a real way. You mentioned inflation. You said you're a little bit more concerned about inflation than maybe some others.
Markets pricing in about 100 basis points of cuts between now and this time next year from the Fed. Does that therefore seem reasonable to you or markets are over their skis in pricing? I I I think you know markets have to make a forecast. I want to point out that forecasts have like almost always been wrong.
Uh and the Fed's been wrong too. So it isn't like their forecast is you know going to be accurate. if inflation does it goes up starts ticking up for whatever reason and it might you know it's gonna be hard to do a 100 points they might do some you know and then they have the battle you know the give and take of if if unemployment starts going up obviously they're going to do some so we'll we'll see you you've long talked about geopolitics as being a risk factor we're seeing gold at $4,000 we're seeing Bitcoin at record highs the dollar though year to date down about 8% on the Bloombo dollar index are you seeing structural shifts out of the US dollar and is that sustained theme
a little bit, but again, I wouldn't have heartburn over it. The dollar did well for a long time. If you if you own US stocks, so foreigners own something like $35 trillion of US stocks and bonds. And because this stock market's gone up, your allocation of the US has gone up. I think it's perfectly reasonable for investment committees in Europe and around the world to cut back a little bit of their equity ownership.
We've also seen people changing their hedge ratios and stuff like that. So it it may just be a rational adjustment to you know I don't expect a stronger dollar the tariffs has this effect. Um but it's still if you look at America still the greatest place in the world to invest in long term and deal making seems to be picking up and of course JP Morgan played a significant role in the takeover the take private of EA $20 billion in financing provided by JP Morgan.
Is that a marker in the sand? Is that is that a one-off as a as a as a deal of that type or is it a a sign of more competition between frankly the banks and and private credit? Well, look, we're agnostic about private credit. So, there may be competition or not. We want our customers to do it their own interest.
We offer both, you know, and we did that whole deal in 11 days and we didn't do it that way to make a point to private credit. You know, if they said do it differently, we could have done it differently, too. And so, but there's a lot of merger talk. There's a lot of firepower. Uh there's a lot of tech.
You know, we had a bunch of IPOs in the US. I know there's only been a handful here. Uh the tech world is still doing quite well. You know, 800 companies here. I think it was 400 last year. You know, we we have 500 bankers coming. The innovation economy globally around the world, including added like 50 alone uh here.
So, uh you know, look, I I'm a long-term optimist. I do think asset prices are high, credit spreads are low, and you know, you should take that in consideration how you think about the future. And when when we talk about credit and you talk about debt, I'm thinking of some data in fact that JP Morgan put out on auto loans biggest losses in the most recent months I think since 2020 March of 2020.
Is that idiosyncratic to auto loans in the US or you seeing other weak links being being stressed? I think you know there there were one or two frauds which I won't go through but in general consumer credit was so good it's basically most of that's just normalizing for both credit card uh but subprime order is a little bit worse than normalizing.
It doesn't look like it's getting worse from here, but it might. But a lot of that, if you look at the history of credit for consumers, it's employment. It's when employment or home prices go way down, which, you know, we don't maybe not expect that that drives, you know, credit. The administration is talking about possibly challenging the requirement around quarterly earnings and and you've talked about this, you've written about this with Warren Buffett around the guidance part of earnings and quarterly guidance.
Would you welcome a change like that? And would would would it mean a change at JP Morgan in terms of how often you I would welcome it. We still would probably update investors quarterly with much less stuff and we just be very transparent. I think the bigger problem wasn't just reporting quarterly.
It was a forecasting where you know cos get their back up against the wall. They have to meet these things earnings and they start doing dumb stuff to meet earnings and that kind of public pressure. I think it's a smaller part of a much bigger problem. We've gone from 8,000 public companies in 1996 to like 4,000 today.
And you know that I'm not sure that's good. We drive companies out of it. We have cookie cutter governance. There some activists are good, but they're activists. There's litigation. There's cookie cutter compensation. There's very expensive listing. There's, you know, disclosure rules, which you've heard about them here.
I mean, endless rules. And that it makes it hard for a small company to go public. So, I think and they're trying to do that here. have an active small company going public. That's what we all need. And create an equity culture, which Rachel Reezer is trying to do here. And I think they're doing a good job reducing regulations, you know, trying to make it easier to do business and, you know, reducing regul banks, but also in business in general, you want an active market and we've kind of crushed it and could the research laws and myid and uh disclosure requirements.
So, if I was a regulator, I would take a step back and look at the whole system and say, how can we improve it and make it safer, you know, not and look at it holistically as opposed to, you know, just everything's like a one-off conversation. I need to talk to you about some other changes that the Trump administration's made.
You you are a champion of capitalism and free market capitalism. So when you see stakes taken by the administration or the US government, let's put it that way in terms of Intel golden share for US steel investments in a lithium mine producer. How does that sit with you? Yeah. So the the first thing is there are legitimate complaints around trade.
So just take that first somewhere around just unfair trade. it's unfair to use, you know, it's not just tariffs, it's surpluses, it's capital, it's quotas, it's just, you know, it's the non-tariff barriers. And then there's national security related. So I think a national security, you have to take some special thing.
I call industrial policy, but it's got to be done right. It's got to come with permitting, no social, no virtual signaling. And so like the deal that was done for MP, I thought they did a very smart thing. They're giving MP, which we were part of banking, you know, does rare earth magnets, a ch because they're going to have a long-term contract with the government.
It gives them a chance to survive to get through they call the valley of death and and and they bought a piece of going through that. So, I thought that was really well done. I'm not going to comment all of them. I think you have to be very careful when you get involved in that kind of stuff. Why are you doing it?
What's the long-term benefit? You know, and then of course, you know, if Democrats get in power, they're going to do even more of it. So, I I would be very cautious about how you go about that. I do think they need to do more. You you cannot do certain things in the United States. You think a company's going to do it, they'll be they'll be bankrupt in seven months.
They either need free land, cheaper financing, and maybe the most important thing is long-term purchase agreements with, you know, defense or companies or something that gives them a real chance to build a business. You touched on the fact, look, we're here in the UK. The chancellor is here. She addressed the summit.
She addressed a conference. She's making those changes. Is the UK doing enough? There going to be potentially some changes when it comes to listings. They may be announced in the budget in November. Is enough being done to make the UK to make London an attractive listing destination again? Well, first of all, here it's a wonderful city.
It's a melting pot. The brain power is extraordinary. And I'm talking about not just financial, but lawyers and technology, media. It's it's unbelievable. It's a huge benefit to eur to UK, though I'm not sure the rest of UK appreciates that much. And they are there's saying the right things. They're deregging.
It's not just banks, but business in general, reducing red tape. I call it blue tape now. Um, you know, they're reducing red tape, blue tape. They're, you know, they're trying to create a consolidate the pension and savings schemes, which I think is very smart. Have a little more of an equity risk culture.
You know, not to lose money, but to take a little more risk. And maybe some of these tech companies here, yeah, I applaud everything they're doing. I know the, you know, the public here doesn't applaud as much as I do, but they should, they have to keep going. H1B H-1B visas in the US talking about attracting talent, $100,000.
Is is that a barrier to to the US tech sector? Are you concerned about that? No, I'm not. Again, I got heartburn. It's 600,000 employees. That's it. We have 160 million people working. And I do think, you know, these things happen. I didn't like it when I first I still don't particularly like it, but but you know what?
It was being abused. We know we did the analysis and the work. It was not supposed to be to bring cheaper workers here to make more money for your company. It was meant to bring very talented people in you don't necessarily have to for your company. And we do we we may have made some mistakes, but let's just fix the system.
I was with the president once and he said more merit-based, more merit-based. In fact, I heard him say we should stamp a green card in every person in this country who went to university or advanced degrees and have them stay here and build their career here. That's would be my belief. I want them to go back to that.
Yeah. Not not make it harder to be or make it easier for real merit. You speak to the you speak to the president every week? No. Okay. I've spoken to him a couple of times. Jamie D, chairman CEO JP Morgan. Thank you very much indeed. really appreciate it.
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