00:00J.P. Morgan, we're here on Sunday. You were celebrating your 90-year anniversary in Saudi Arabia.
00:06And I've got to say, for those who are unfamiliar with Saudi Arabian history, that's even before oil was discovered.
00:11Yeah, absolutely. I'm so happy to be here with you.
00:14And if you all could only see the crowds of people that are here, 9,000 delegates here in Riyadh for the FII.
00:22It's a really exciting time period, but it's even more exciting for J.P. Morgan.
00:25A 90-year anniversary celebration with all of the ministers and important heads of different sectors and the like.
00:35But it is incredible to think that 90 years ago, we were facilitating gold payments and moving it here into the region before oil was even discovered.
00:45And the journey that we've been on with all of our partners here, it was great to see at the J.P. Morgan event that we had on Sunday night to celebrate.
00:53So many of the ministers said, I was trained by the J.P. Morgan credit training program back in the day.
01:00And so we're very proud of that and our partnership that we've had for so many years.
01:04Quite the evolution for both J.P. Morgan and, of course, for the country as well.
01:07You know, now we talk about diversification away from oil.
01:10But you sensed an opportunity 90 years ago.
01:13Now there are so many banks coming to the region.
01:16It's becoming a lot more competitive.
01:17How do you hold on to your market share and compete versus all of the other international banks that want to gain this market share?
01:24It's competitive everywhere in the world.
01:26And it's increasingly competitive here.
01:28We're very proud.
01:29We have 430 people in the region.
01:31We just this week named Riyadh as our global headquarters for the region here.
01:36So we're very excited about what that means for the opportunity.
01:39But, you know, we facilitate inbound and outbound payments, investments, all of the things that make the world go round.
01:48And we work very hard.
01:49And it takes very long-term time to make these partnerships and develop the trust.
01:53And so to think about not just one industry but many industries, to go through hiccups, to ride through good times and bad times.
02:01And, you know, that's what makes these relationships.
02:03And as these countries have matured and grown very quickly, what you have seen is an accumulation of wealth.
02:09So wealth management is also a big focus for many banks out here.
02:12Very much so.
02:12And you have a huge influx as well of ultra-high net worth individuals that, again, are adding to this cycle.
02:18Would you say that wealth management investment priorities in this part of the world are different from other jurisdictions?
02:26No different.
02:27You know, everybody has a home country bias.
02:29We can't get away from it depending on where we live.
02:31But everybody sees the opportunities.
02:33And if you just show up at FII for a couple of days, all the opportunities are here.
02:37Every major asset manager is here.
02:39Everyone's talking about the opportunities.
02:41Many discussions on AI, as you know.
02:43But everything from energy to onshoring, reshoring, manufacturing, and all the different opportunities that exist.
02:54Yeah.
02:54Let me ask you about, you know, some signals that are coming from the U.S. economy.
02:58Obviously, we have the Fed meeting coming up tomorrow.
03:00They're widely anticipated to cut interest rates.
03:02But CEO J.B. Diamond a couple of weeks ago was talking about there being potentially other cockroaches in the credit market, something to be alert to.
03:12How do you see the signals coming through right now?
03:15Yes.
03:15Well, I mean, we stress test the portfolio of investments that we make with our own balance sheet as well as our clients' balance sheets each and every day.
03:23And you have to do that, especially when you get to top E levels in all of these markets, which we've had.
03:28We haven't had a correction in a long time.
03:31We haven't had a recession in a long time.
03:33And so the closer you get to that time period, nobody knows when it is.
03:36You have to make sure that the clients and the balance sheet of whether it's an individual, an institution, a sovereign wealth fund, or our own bank is able to sustain that.
03:46And so when we stress test that, we look for, you know, what are the little even micro signs of what might be going wrong.
03:53And that's our job.
03:55That, you know, J.P. Morgan prides itself on fortress balance sheet.
03:58We want to be there in good times and bad for our clients.
04:00And so we need to make sure that we're able to have the cash ability to help clients as they ride through those times.
04:08And there aren't major signs, but you're seeing, you know, little pockets of it.
04:12You see a little amend and extend on credit terms and the like.
04:15And so we're watching it, and we're watching it very closely.
04:18Yeah.
04:19How are you feeling about 2026?
04:20Again, I started this off saying the Fed are about to cut interest rates again.
04:24Yes.
04:24How do you see the momentum going in to 2026?
04:28Because most recent results are obviously quite positive.
04:30Can that momentum continue?
04:31Yes.
04:32I mean, we should be seeing more inflation than we are.
04:35There's a lot of things.
04:36Remilitarization should be inflationary.
04:38Tariffs should be inflationary.
04:40It hasn't cut through the system as much as you would have thought.
04:43And so you're getting interest rate cuts.
04:45That's very bullish for the economy.
04:46You're getting a lot of reinvestment.
04:48That's very bullish for the economy.
04:50And so I think 2026 is setting itself up to be another great year.
04:55It's just you have to pick your pockets.
04:56You have to risk manage.
04:57You have to make sure that the things that have ridden up so well, have you right-sized them?
05:01Have you trimmed them to be in the pocket of the portfolio that they should be?
05:06So you mentioned artificial intelligence earlier.
05:08I do want to ask you whether you are actually seeing a return on investment by introducing AI into your operations.
05:16And then also, you know, whether actually there's scope for AI to replace people's jobs, especially junior and analyst level.
05:23You know, I mean, AI is, a lot of people have said, is there an AI bubble?
05:28I said, that's like asking if there's a computer bubble.
05:30It's not really a thing.
05:31AI is a new way of working.
05:33And it's a really important factor in all investments that people make in all companies.
05:40And especially JP Morgan.
05:41You know, we spend a lot of time on it.
05:43As you know, we spend $18 billion on technology a year.
05:45And we're on the forefront of many things, whether it's AI, quantum computing, and the like.
05:50But for us, it's about deploying it in a way that you rethink how you do things in the organization.
05:55Can you do it faster, better, cheaper, quicker, smarter?
05:58Can you catch the errors?
05:59Can you protect the clients?
06:00Can you make sure that the cyber defenses are even stronger than they would be?
06:04But if you look at S&P 500 companies, only about 10% of them say that they actually have AI in their products and services out there.
06:11And if you look at the mentions of AI when you talk about quarterly earnings or even just our own investment managers going and meeting for the different management teams out there around the world and all the companies, it's only about 40% to 50% of international companies.
06:26The good news is it's even higher in the U.S., about 70%.
06:28And that will trickle through.
06:31And it's just like how we see it in our own company.
06:33You start with fixing the no-joy work.
06:36You know, get rid of all the no-joy work.
06:37Try to get AI to optimize those kind of things.
06:40And then over time, you realize you have to stop the way you're doing all things and rethink entire processes and procedures.
06:48Why am I optimizing 10 steps when I maybe should have just gone from step 1 to step 10 and removed everything in between?
06:55Ultimately, do you see AI as a massive cost deflator?
06:59Is that how you're thinking about it from a business perspective?
07:01It could be a cost deflator, but it should be just a great efficiency gain.
07:05And the better you can do things and the better products and services, and they're tailored just to you.
07:11I know exactly what you want on which day, what you've been waiting for, what you're nervous about, and how do I customize that, and then how do I do that at scale?
07:20And when I can do that with AI, and if I have curious talent, that's all you need is curiosity and a little AI, and you can go very far in making the right products and services for the clients of the future.
07:32Ultimately, though, do you see some of these jobs, as I mentioned, those entry-level jobs, being replaced by AI?
07:39Not at all.
07:42Somebody earlier today said, yes, a lot of jobs will be replaced.
07:45I totally disagree with that.
07:46I think the jobs that will be replaced are those for the people that are not curious, for the people that are not using AI, for the people that don't say, how do I rethink this?
07:55How do I dig in deeper?
07:56And so every time you get to think about using the technology that's at your fingertips and figuring out, you know, how many times did you mention something last week when I was watching you on late-night Bloomberg TV?
08:09Which I do every night of my life, and it's a great joy to hear all the things that you're covering.
08:15And you say to yourself, well, if I could just plug that in, and if I could have it summarize what you're saying every night for me, and I could think about how I'm going to apply that, and then I take those vast streams of information.
08:27That's all you need.
08:28You need curiosity, and you need great people to do it.
08:31So I don't think it's a job destroyer for those kind of people.
08:34I think it's a job destroyer for the people that are waiting and fearful that it is going to take over their job.
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