JPM CEO Dimon: AI Cost Saving Matching Money Spent

Bloomberg

Watch JPM CEO Dimon: AI Cost Saving Matching Money Spent - Bloomberg on Dailymotion

Transcript

00:00We're not exaggerating that when it comes to voices on Wall Street, this is the one everybody

00:05globally really listens to. Yeah, without a doubt. He's the dean of Wall Street CEOs. He's been in

00:10that seat for almost 20 years and looks like he'll be there for at least another year or two or more.

00:15So when you look across the landscape, it's very hard to find someone with that level of longevity.

00:21And then you have to remind yourself that he's at the helm of the nation's largest bank. So

00:26that magnifies the weight of his voice. So anything he said that you found interesting

00:31ahead of earnings next week? Before we get into the earnings part, I will say I was quite

00:35fascinated by some of his commentary around AI because this is a question we like to ask all

00:40bank executives. Can you put a number on it? Can you tell us what the savings are? And for the last

00:46several months, the answer we've been getting from a number of these folks has been there have been

00:52obvious productivity gains. You know, easiest to quantify will be an engineer can code 40% faster

00:59or you can do, you know, you can very specifically drill down on that front and you can save time.

01:05But they've all been struggling to put a real number on it. They've been struggling to tell

01:09investors and analysts that come 2026, I will be able to reduce 500 million in costs or a billion

01:15dollars in costs. So it was very interesting to hear Jamie talk about it. Of course, I think when

01:19he's talking about AI, he's taking a little bit more of a broader lens, not the post chat GPT

01:27perplexity world of AI, but even going back to 2012. So I'm assuming he's talking about this idea of

01:32increased adoption of automate automation, which banks have been doing for quite a long time.

01:40And in his case, he says JPM has been using some form of AI since 2012. But he did say in that period,

01:47we are seeing roughly $2 billion in cost savings. So we're spending $2 billion in AI and we're seeing

01:53that cost savings. So at least he's able to justify it to his board, his investors, his analysts that,

01:58you know, there could potentially be more savings ahead. But we're already seeing enough to convince

02:04us that we can continue spending at this level. And it's all a net positive for JPMorgan. That was

02:09fascinating for me. Yeah, for $2 billion expense, we have about $2 billion of cost savings for AI. But he

02:14also said, it's the tip of the iceberg and that JPMorgan is getting better at AI. What does he

02:19mean when he says it's the tip of the iceberg? Is that from the way they're using it internally?

02:23Is it from what customers are going to see? Is it everything? I mean, what's the vision that

02:27banking executives have for this technology? So, and again, we have to guess a little bit here,

02:32but we have to assume as a large consumer bank, as a large retail bank, the places where you can

02:37obviously see the obvious impact is customer service in detecting fraud, in handling queries and

02:43complaints and whatnot. But you can take it beyond that into the kinds of things that will take it

02:48beyond the realm of simple customer service issues into how it can aid traders into how it can aid

02:53investment bankers. And therefore, it could perhaps in aspects of asset management and wealth

02:58management, at which point it touches every large segment of JPMorgan. So the benefits that they're

03:04already seeing in the retail banking segment could expand well beyond that into every other part of

03:09JPMorgan. And that's when you see this $2 billion of cost savings that he touts, a number that could

03:15go much larger than that, and will keep him happy to continue investing in this space.

03:21How do you take, I mean, he said a lot of merger talk, firepower in the market. And I know maybe not

03:27everything was in that interview. And I highly recommend people check it out on the Bloomberg for

03:30the entirety or the entire interview. But he also talked about consumers okay now, but recession could

03:36happen in 2026. But again, he seemed like it'll be okay. Is that again, like a reminder, there's the K

03:42shaped economy for a recession is going to hurt some people, and maybe more so than

03:48it's a little bit of also which side of the bed does Jamie Dimon get out of? Because there are some

03:53interviews where he does sound like the weatherman warning about the dark clouds on the horizon. And

03:58there are other interviews where he will like to stress the fact, whatever happens in the economy, we

04:03fortress JPMorgan are going to be completely fine, which is why I found a statement

04:06funny when he said, when he was asked about, are you worried about a recession? No. So,

04:11you know, when when our anchor asked him, so does that mean there's no recession? He said,

04:14no, no, no, there could well be a recession in 2026. I'm just saying I won't be worried about it

04:19because I'm prepared to deal with it. Two different statements.

04:22Bank earnings next week. We like to hear from these banks quarterly. I can speak to that as a

04:28journalist, as a broadcaster. Are we going to keep hearing from them quarterly?

04:32Jamie actually addressed that point. And I guess you're referencing this push by

04:36President Trump to say we need to move away from quarterly earnings. We perhaps make it

04:40six every six months because it has become too cumbersome. Jamie, the way he addressed it,

04:45he said, look, we'll probably still give quarterly updates to our investors, perhaps not with that

04:50level of detail. But I think it is it would be fascinating for anyone to listen to that full

04:54clip because he did hit on some very critical issues. He says in the last 30 years, the number

05:00of public companies has actually gone down. We've gone from 8000 public companies to 4000 public companies.

05:05You know, a lot of this perhaps has to do with the fact that in the pre IPO stage, the amount of

05:11funding and financing that's available to companies makes it easier for them to stay private for longer.

05:16But he also adds to the fact that there are just onerous requirements of public companies that makes

05:23planning for the long term hard. And he was very specific about it because when a CFO goes on an

05:28earning call and gives you guidance, gives you an estimate, Jamie Dimon actually took us behind the

05:33scenes to tell us what happens when you float a number like that. Then you're spending the next 12

05:38weeks making sure that you're going to hit your mark because you don't want a black eye in the market

05:44when you come for your next earnings call, which will make you do some stupid things, which will make

05:49you want to move some resources from one side to another. Let's say you come out with an NII estimate

05:55and you're not meeting it six weeks into the quarter. You want to spend more shift, more resources

06:02towards making sure you meet that NII target, even if that's not the best use of the company capital

06:07allocation. All I would say is an environment where we look at open AI, right? And what is it? Half a

06:11trillion dollar potential in terms of its market valuation. So much money floating in, out,

06:16all around that company, it's not public. And we really don't know everything behind the scenes

06:23when it comes to its financials. And that's why company management will tell you we'd like to have

06:27it exactly that way. Listen to our advertising thoughts, not drill into our numbers.

Category

Transcript

Be the first to comment

Recommended