new York
CNN
—
Jamie Dimon believes that artificial intelligence will have a huge impact on global trade this year.
Dimon, one of the world’s most influential business leaders, said in its annual letter to shareholders As of Monday, while he doesn’t yet know the full effect AI will have on business, the economy or society, he knows its influence will be significant.
“We are completely convinced that the consequences will be extraordinary and perhaps as transformational as some of the major technological inventions of the last few centuries: think of the printing press, the steam engine, electricity, computing and the Internet , among others,” writes JPMorgan. Hunting (JPM) »wrote the CEO in the letter.
The explosion of AI has already transformed workplaces worldwide and almost 40% of global employment could be disrupted by AI, according to the International Monetary Fund. Industries of medicine has finance has music have already felt its effects.
Stocks of companies associated with the AI boom have soared. Chipmaker Nvidia (NVDA) is up more than 219% over the past 12 months, while Microsoft (MSFT) is up almost 50%.
JPMorgan, the world’s largest bank by market capitalization, is exploring the potential of generative AI within its own ecosystem, Dimon said. Software engineering, customer service, operations, and overall employee productivity are all undergoing transformation through AI.
“Over time,” Dimon writes, “we anticipate that our use of AI will have the potential to increase virtually all jobs and impact the composition of our workforce.” This may reduce some job categories or roles, but it may also create others.
JPMorgan’s organization now has more than 2,000 AI and machine learning experts, and the bank recently announced the creation of a new role of chief data and analytics officer who sits on its operating committee.
Dimon also acknowledged the risks associated with the AI boom. “You may already know that bad actors are using AI to attempt to infiltrate business systems to steal money and intellectual property or simply to cause disruption and damage,” he said. -he writes.
In January, JPMorgan said it had observed a considerable increase in hackers’ daily attempts to infiltrate its systems over the past year, underscoring the growing cybersecurity challenges the bank and other Wall Street firms face.
JPMorgan Chase, the largest U.S. bank by assets, now invests $15 billion a year and employs 62,000 technologists. to, in part, help strengthen its defense against cybercrime.
JPMorgan acquired most of the assets of the First Republic last May, after the government seized the San Francisco-based regional bank. It was the second largest bank failure in U.S. history.
The fall comes amid the collapse of three regional U.S. lenders last spring, which left financial institutions and regulators scrambling to prevent a banking crisis from spreading.
“When we purchased First Republic in May 2023 following the failure of two other regional banks, Silicon Valley Bank (SVB) and Signature Bank, we believed the current banking crisis was over,” Dimon wrote. Monday.
Only these three banks, he said, had the “toxic combination” of extreme interest rate exposure, large unrealized losses and highly concentrated deposits. But he warned that if interest rates rise or there is a recession, “there will be a lot of stress – not just in the banking system but also in indebted businesses and others.”
Dimon once again warned investors that the United States “could be entering one of the most dangerous geopolitical eras since World War II.”
Even though key economic indicators appear strong and inflation rates are falling, he sees many potential risks.
“All of the following factors appear to be inflationary: ongoing fiscal spending, the remilitarization of the world, the restructuring of global trade, the capital needs of the new green economy, and possible rising energy costs in the future ( even though there is currently an oversupply of energy resources). gas and abundant spare capacity in oil) due to the lack of necessary investments in energy infrastructure,” he wrote.
Markets are currently pricing in a 70-80% chance of a soft landing, where inflation would be controlled without triggering an economic slowdown. Dimon wrote that these probabilities are far too optimistic.
Traders, he said, are paying too much attention to the monthly machinations of the Federal Reserve and not enough to long-term geopolitical and political risks.
“There appears to be too much focus on monthly inflation data and modest interest rate changes,” he wrote.
Instead, investors should think about what might happen in a year or two. “Small changes in interest rates today may have less impact on inflation in the future than many think,” he said.
Dimon has previously raised concerns about high levels of US debt, fiscal stimulus and deficit spending, and the effects of quantitative tightening.
“The impacts of these geopolitical and economic forces are far-reaching and somewhat unprecedented,” he wrote. “They may not be fully understood until they have fully played out over several years.”
