The Significance of AI: Jamie Dimon Compares its Potential Impact to the Printing Press, Electricity, and Computers

Jamie Dimon, the CEO and chairman of JPMorgan Chase, recently released his annual letter to shareholders, in which he discussed the significance of artificial intelligence (AI) and its potential impact on society. Dimon believes that AI could be as transformational as some of the major technological inventions of the past several hundred years, such as the printing press, the steam engine, electricity, computing, and the internet.

Dimon’s focus on AI is noteworthy because of his status as one of the most successful leaders in finance. He believes that the consequences of AI will be extraordinary, although the full effect and precise rate at which it will change our business and society are still unknown. The technology has gained prominence since ChatGPT became a viral sensation in late 2022, as it can generate human-sounding responses to queries.

JPMorgan Chase has already embraced AI and has more than 2,000 AI and machine learning employees and data scientists working on 400 applications, including fraud detection, marketing, and risk controls. The bank is also exploring the use of generative AI in software engineering, customer service, and ways to boost employee productivity. The potential impact of AI is significant enough to potentially touch all of the bank’s roughly 310,000 employees, with some workers being assisted by AI while others may be replaced. This may require the company to retrain workers for new roles.

Dimon’s letter also touched on other topics, such as inflationary pressures, the economy’s soft landing, interest rates and commercial real estate, collaboration between banks and regulators, rising geopolitical risks, social media, and an update on the First Republic deal.

Dimon expressed ongoing concerns about inflationary pressures and warned that conditions affecting the future should be considered. He also believes that the odds of a soft landing for the economy are lower than what the markets are pricing in. If long-end rates increase over 6% accompanied by a recession, it could lead to stress in the banking system and with leveraged companies. Dimon also highlighted the lack of collaboration between banks and regulators, stating that without sufficient analysis, it is hard to be confident that regulation will achieve desired outcomes without undesirable consequences.

Geopolitical risks were also a point of concern for Dimon, particularly with Russia’s invasion of Ukraine and ongoing violence in the Middle East. He emphasized that national security is paramount, even if its importance may seem to recede in tranquil times. Dimon also suggested that social media companies should give users more control over what they see and how it is presented, allowing them to curate their feeds according to their preferences.

Finally, Dimon provided an update on the First Republic deal, stating that the acquisition of a major company involves complexity. JPMorgan Chase recorded an accounting gain of $3 billion on the purchase and expects to add more than $500 million to earnings annually, which is now believed to be closer to $2 billion.

In conclusion, Jamie Dimon’s annual letter to shareholders highlights the significance of AI and its potential impact on society. JPMorgan Chase has already embraced AI and is actively exploring its use in various areas of the bank. However, the full effects of AI are still unknown, and it remains to be seen how it will change businesses and society at large. Dimon’s letter also addresses other important topics such as inflationary pressures, the economy’s soft landing, geopolitical risks, collaboration between banks and regulators, and social media.