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00:00Jamie, we're talking about the fact that you have lent into technology over the last decade,
00:03billions of dollars invested across the business.
00:05When it comes to AI, which parts of the J.P. Morgan business are going to be most transformed by AI?
00:12Yeah, so we've been doing AI since 2012, so people think it's a good new thing.
00:16Gen AI is kind of new, but not all of AI.
00:18We have 2,000 people doing it, spend $2 billion a year on it.
00:22It affects everything, risk, fraud, marketing, idea generation, customer service,
00:27and it's kind of the tip of the iceberg, and so we're deploying it.
00:31Every time we meet as a business, we ask, what are you doing in AI?
00:33What are you doing to serve your people? Why can you do better?
00:35What is somebody else doing?
00:37So we're freely deploying it, and safely.
00:39We have a lot of rules and regulations in place for our own data and how we use it, etc.
00:44Is it having a material impact on revenues for J.P. Morgan? If not now, then when?
00:47So we have shown that for 2 billion of expense, we have about 2 billion of benefit.
00:52Some we actually can do real detail.
00:53We did this, we were to do a TED count, we saved this time and money,
00:57we reduced errors. Some you can't.
00:59It's just improved service, something like that.
01:00It's almost worthless to say, what's the MPV?
01:03But we know about $2 billion of actual cost saves.
01:07And like I said, I think it's the tip of the iceberg.
01:09We're getting better and better at it.
01:11We know how to do it.
01:12As the managers learn how to do it, they're asking more questions.
01:15Why can't it do X and why can't it do Y?
01:17And then on my phone here, we have a suite, an LLM suite,
01:20on internal data, to do research and summarize reports and scan contracts and do things like that.
01:28150,000 people a week use it.
01:30So it's quite productive.
01:32More and more of your employees are using the Igentic AI.
01:35Our own LLM.
01:37And Igentic is just starting.
01:39But that will be deploying over time, too.
01:41But it's also been used for coding.
01:43I mean, it's being used quite broadly now.
01:46And like I said, part of it is getting your mind working around how you're going to use this thing.
01:50And so our managers and leaders have to do it.
01:53If you look out five years, are there more jobs in banking as a result of AI or fewer?
02:00Look, I think people shouldn't put their head in the sand.
02:03It is going to affect jobs.
02:05So think of every application, every service you do, you'll be using AI.
02:10Some to enhance it.
02:11Some of it will be you doing the same job.
02:13You're doing a better job at it.
02:15There will be jobs that it eliminates.
02:17But you're better off being way ahead of the curve and retraining people.
02:21So we retrain and redeploy a lot of people.
02:23So for JP Morgan, if we're successful, we'll have more jobs.
02:27But there will probably be less jobs in certain functions.
02:30When you look at the spend on AI, infrastructure, chips, open AI, not making a profit.
02:38Loss making, deals of about a trillion dollars this year.
02:41The hyperscale is the spend there.
02:43What is your reaction when you see those numbers crossing?
02:45Are you comfortable with that kind of spend on the infrastructure around AI?
02:48It's a lot.
02:49I'm not sure it's all ever going to be totally spent.
02:52I think when you look at big tech like tech that happens like this, and you go look at cars,
02:56you go look at television, you go look at internet, big money's got spent.
03:00There were a lot of losers, a lot of winners.
03:03In total, it was productive.
03:04So even take the internet bubble, remember that blew up, you and I can probably name 100
03:09companies that were worth $50 billion and disappeared, but out of it came Facebook, YouTube, Google.
03:17So there will be real big companies, real big success.
03:20It will work in spite of the fact that not everyone who invests in it is going to have
03:24a great investment return.
03:25And of course, those investments are part of what has powered this bull market in stocks.
03:29And on Sunday, it will be three years of that bull market.
03:31Where do you think we are in that bull market?
03:34Is there any complacency there?
03:35Is it underpinned by rational factors?
03:38Is there more momentum?
03:39Yeah, you know, look, we're in a bull market.
03:41It's been clear asset prices are high, credit spreads are low, consumers still okay, the
03:46consumer has jobs.
03:47Remember, jobs, jobs, jobs are what usually starts to force people to cut back and change
03:52things and consumers spend less and companies cut back.
03:55So far, so good.
03:56There are a lot of issues out there that, you know, the economy's got to deal with from
04:00all the geopolitical stuff.
04:02Maybe they'll sort out well.
04:03What's going to happen to inflation?
04:04I'm a little more nervous about inflation not coming down like people expect.
04:08That might be a surprise.
04:10On the other hand, there's a lot of spending.
04:12There's a lot of government spending, which is inflationary too, by the way.
04:15And so, look, I don't know.
04:17I hope for the best, plan for the worst.
04:20And you're not worried about a recession in 2026 for the U.S.
04:22You've made that clear.
04:24I think it could happen in 2026.
04:25I just, I'm not worried about it as a different statement.
04:28We'll deal with it.
04:29We'll serve our clients.
04:30We'll navigate through it.
04:31A lot of us have been through them before.
04:32You don't wish it because, you know, certain people get hurt.
04:35But it could happen in 2026.
04:37We're still, of course, in the U.S. government shutdown.
04:38But I do think there are positives.
04:40Like, deregulation is a real positive, which also helps animal spirits to be positive.
04:44And, you know, in the one big, beautiful bill, there's also more stimulus that has positives
04:49for the economy but maybe negatives for inflation.
04:52So how it all sorts out, we'll see.
04:54Markets are looking through the U.S. government shutdown.
04:57Is there a period of time, if this shutdown continues, where markets start to wake up and
05:02become concerned?
05:03I don't think so.
05:04Look, I don't like shutdowns.
05:06I think it's just a bad idea, and I don't care what the Democrats or Republicans say.
05:10It's a bad idea.
05:11It's not a way to run a railroad.
05:12I don't think it's critical.
05:14We've had, I forgot the number four or five or six, you know, one of them went for 35 days.
05:18I'm not sure anyone really affected the economy and the market in a real way.
05:23You mentioned inflation.
05:25You said you're a little bit more concerned about inflation than maybe some others.
05:27Markets pricing in about 100 basis points of cuts between now and this time next year
05:32from the Fed.
05:32Does that therefore seem reasonable to you, or markets are over their skis in pricing?
05:38I think, you know, markets have to make a forecast.
05:41I want to point out that forecasts have almost always been wrong, and the Fed's been wrong
05:46too.
05:46So it isn't like their forecast is, you know, going to be accurate.
05:49But if inflation goes up, starts ticking up for whatever reason, and it might, you know,
05:55it's going to be hard to do 100 points.
05:57They might do some, you know, and then they have the battle, you know, the give and take
06:00of if unemployment starts going up, well, obviously they're going to do some.
06:03So we'll see.
06:05You've long talked about geopolitics as being a risk factor.
06:08We're seeing gold at $4,000.
06:09We're seeing Bitcoin at record highs.
06:11The dollar, though, year to date down about 8% on the Bloomberg dollar index.
06:15Are you seeing structural shifts out of the U.S. dollar, and is that a sustained theme?
06:20A little bit.
06:20But again, I wouldn't have heartburned over it.
06:23The dollar did well for a long time.
06:25If you own U.S. stocks, or foreigners own something like $35 trillion of U.S. stocks
06:31and bonds, and because the stock market's gone up, your allocation of the U.S. has gone
06:34up, I think it's perfectly reasonable for investment committees in Europe and around the
06:38world to cut back a little bit of their equity ownership.
06:41We've also seen people changing their hedge ratios and stuff like that.
06:44So it may just be a rational adjustment to, you know, I don't expect a stronger dollar.
06:49The tariffs have this effect.
06:51But it's still, if you look at America, it's still the greatest place in the world to invest
06:55long term.
06:56And deal making seems to be picking up.
06:57And of course, J.P. Morgan played a significant role in the takeover, the take private of EA,
07:03$20 billion in financing provided by J.P. Morgan.
07:06Is that a marker in the sand?
07:07Is that a one-off as a deal of that type?
07:10Or is it a sign of more competition between, frankly, the banks and private credit?
07:15Well, look, we're agnostic about private credit.
07:17So there may be competition or not.
07:19We want our customers to do what's their interest.
07:21We offer both, you know.
07:22And we did that whole deal in 11 days.
07:24And we didn't do it that way to make a point to private credit.
07:27You know, if they said do it differently, we could have done it differently, too.
07:30But there's a lot of merger talk.
07:32There's a lot of firepower.
07:34There's a lot of tech.
07:35You know, we had a bunch of IPOs in the U.S.
07:37And I know there have only been a handful here.
07:40The tech world is still doing quite well.
07:42You know, the 800 companies here.
07:44I think it was 400 last year.
07:46You know, we have 500 bankers coming.
07:48The innovation economy globally around the world, including that is like 50 alone here.
07:53So, you know, look, I'm a long-term optimist.
07:56I 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.
08:02When you talk about credit and you talk about debt, I'm thinking of some data, in fact, that J.P. Morgan put out on auto loans.
08:07Biggest losses in the most recent months, I think since March of 2020.
08:11Is that idiosyncratic to auto loans in the U.S.?
08:14Or are you seeing other weak links being stressed?
08:16I think, you know, there were one or two frauds, which I won't go through.
08:19But in general, consumer credit was so good, it's basically most of that's just normalizing.
08:25For both credit card, subprime order is a little bit worse than normalizing.
08:30It doesn't look like it's getting worse from here, but it might.
08:33But a lot of that, if you look at the history of credit for consumers, it's employment.
08:37It's when employment or home prices go way down, which, you know, we don't, maybe not expect, that that drives, you know, credit.
08:44But the administration is talking about possibly churnaging the requirement around quarterly earnings.
08:50And you've talked about this, you've written about this with Warren Buffett around the guidance part of earnings and quarterly guidance.
08:56Would you welcome a change like that?
08:57And would it mean a change at J.P. Morgan in terms of how often you update investors?
09:01I would welcome it. We still probably update investors quarterly with much less stuff and we just be very transparent.
09:07I think the bigger problem wasn't just reporting quarterly.
09:09It was a forecasting where, you know, CEOs get their back up against the wall.
09:13They have to meet these things, earnings, and they start doing dumb stuff to meet earnings and that kind of public pressure.
09:18I think it's a smaller part of a much bigger problem.
09:21We've gone from 8,000 public companies in 1996 to, like, 4,000 today.
09:27And, you know, that, I'm not sure that's good.
09:30We drive companies out of it.
09:31We have cookie-cutter governance.
09:33Some activists are good, but they're activists.
09:35There's litigation.
09:36There's cookie-cutter compensation.
09:38There's very expensive listing.
09:40There's, you know, disclosure rules, which you've heard about them here.
09:43I mean, endless rules.
09:44And that, it makes it hard for a small company to go public.
09:47So I think, and they're trying to do that here, have an active small company going public.
09:51That's what we all need.
09:53And create an equity culture, which Rachel Rees was trying to do here.
09:56And I think they're doing a good job reducing regulations, you know, trying to make it easier to do business,
10:01and, you know, reducing regulation in banks but also in business in general.
10:04You want an active market, and we've kind of crushed it.
10:07The research laws and MIFID and disclosure requirements.
10:12So if I was a regulator, I would take a step back and look at the whole system and say,
10:17how can we improve it and make it safer?
10:20You know, not, and look at it holistically as opposed to, you know, just everything's like a one-off conversation.
10:25I need to talk to you about some other changes that the Trump administration has taken.
10:28You are a champion of capitalism and free market capitalism.
10:31So when you see stakes taken by the administration or the U.S. government, let's put it that way,
10:35in terms of intel, golden share for U.S. steel, investments in a lithium mine producer,
10:40how does that sit with you?
10:42Yeah. So the first thing is there are legitimate complaints around trade.
10:47So just take that first.
10:48Some are around just unfair trade.
10:50It's unfair to use, you know, it's not just tariffs.
10:53It's surpluses, it's capital, it's quotas, it's just, you know, it's the non-tariff barriers.
10:58And then there's national security related.
11:00So I think in national security, you have to take some special thing.
11:03I call it industrial policy.
11:04But it's got to be done right.
11:05It's got to come with permitting, no social, no virtual signaling.
11:10And so, like, the deal that was done for MP, I thought they did a very smart thing.
11:14They're giving MP, which we were part of banking, you know, does rare earth magnets.
11:18Because they're going to have a long-term contract with the government,
11:21it gives them a chance to survive, to get through what they call the valley of death.
11:25And they bought a piece of the coin to do that.
11:27So I thought that was really well done.
11:28I'm not going to comment all of them.
11:30I think you have to be very careful when you get involved in that kind of stuff.
11:33Why are you doing it?
11:33What's the long-term benefit?
11:35You know, and then, of course, you know, if Democrats get in power,
11:37they're going to do even more of it.
11:39So I would be very cautious about how you go about that.
11:42I do think they need to do more.
11:44You cannot do certain things in the United States.
11:47You think a company is going to do it, they'll be bankrupt in seven months.
11:50They either need free land, cheaper financing,
11:53and maybe the most important thing is long-term purchase agreements with, you know,
11:57defense or companies or something that gives them a real chance to build a business.
12:02You touched on the fact, look, we're here in the U.K.
12:03The chancellor will hear.
12:04She addressed the summit.
12:05She addressed the conference.
12:06She's making those changes.
12:08Is the U.K. doing enough?
12:09There are going to be potentially some changes when it comes to listings.
12:11They may be announced in their budget in November.
12:14Is enough being done to make the U.K., to make London an attractive listing destination again?
12:19Well, first of all, the summit here, it's a wonderful city.
12:21It's a melting pot.
12:23The brainpower is extraordinary.
12:24And I'm talking about not just financial, but lawyers and technology, media.
12:29It's unbelievable.
12:30It's a huge benefit to U.K., though I'm not sure the rest of the U.K. appreciates that much.
12:35And they are saying the right things.
12:39They're deregging.
12:39It's not just banks, but business in general, reducing red tape.
12:43I call it blue tape now.
12:45You know, they're reducing red tape, blue tape.
12:47They're trying to consolidate the pension and savings schemes, which I think is very smart,
12:53have a little more of an equity risk culture, not to lose money, but to take a little more risk.
12:57Maybe some of these tech companies here.
12:59Yeah, I applaud everything they're doing.
13:01I know the public here doesn't applaud as much as I do, but they have to keep going.
13:06H-1B visas in the U.S., talking about attracting talent, $100,000, is that a barrier to the U.S. tech sector?
13:14Are you concerned about that?
13:16I'm not.
13:18Again, I've got heartburn on it.
13:19It's 600,000 employees.
13:21That's it.
13:22We have 160 million people working.
13:24And I do think, you know, these things happen.
13:26I didn't like it when I first started.
13:27I still don't particularly like it.
13:29But you know what?
13:30It was being abused.
13:31I mean, we did the analysis and the work.
13:33It was not supposed to be to bring cheaper workers here to make more money for your company.
13:37It was meant to bring very talented people in that you don't necessarily have for your company.
13:41And we may have made some mistakes, but let's just fix the system.
13:46I was with the president once, and he said, more merit-based, more merit-based.
13:49In fact, I heard him say we should stamp a green card on every person in this country who went to university or advanced degrees
13:57and have them stay here and build their career here.
13:59That would be my belief.
14:01I want him to go back to that, not make it harder to be here, make it easier for real merit-based.
14:06Do you speak to the president every week?
14:08No.
14:08Okay.
14:09I've spoken to him a couple of times.
14:10Jamie Dyer, chairman, CEO, JP Morgan.
14:13Thank you very much indeed.
14:13Really appreciate it.
14:14Thank you very much.
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