WEBVTT - Bank of America CEO Brian Moynihan Talks 2026 Outlook, AI & More 0:00:02.480 --> 0:00:06.359 Bloomberg Audio Studios, podcasts, radio. 0:00:06.640 --> 0:00:10.280 News for our Bloomberg audiences worldwide. I'm David Western. I'm 0:00:10.280 --> 0:00:12.520 delighted to be joined now by Brian moynihan. He is 0:00:12.560 --> 0:00:15.319 indeed the chair and CEO of Mecca America. So, first 0:00:15.320 --> 0:00:17.160 of all, happy holidays, Brian. Great to be with you. 0:00:18.880 --> 0:00:20.800 Happy holidays. David. Good to see you again. 0:00:21.400 --> 0:00:24.320 So let's start with the year. It's been a very 0:00:24.360 --> 0:00:26.040 strong year for the markets, by the way, a very 0:00:26.040 --> 0:00:28.520 strong year for Bank of America. In the markets. The 0:00:28.560 --> 0:00:31.760 economy's done well, not as well perhaps as the markets 0:00:31.840 --> 0:00:34.720 might indicate. Do you think the economy is in better 0:00:34.760 --> 0:00:37.839 shape because the markets are really over predicting what's going on. 0:00:40.040 --> 0:00:42.080 Look, as you look at our team that we have 0:00:42.120 --> 0:00:44.879 a great research team, as you know, David. Their projection 0:00:45.040 --> 0:00:47.760 for twenty six is a strong economy two point four 0:00:47.840 --> 0:00:51.479 percent us GDP growth. And that's strong not only on 0:00:51.520 --> 0:00:54.440 a relative based to trend above two percent, which is 0:00:54.440 --> 0:00:56.600 the trend. It's strong that way, but it's also strong 0:00:56.680 --> 0:00:58.400 relative to the rest of the world in the sense 0:00:58.440 --> 0:01:02.840 that you see that basically, whether it's Euroa or Japan, 0:01:03.280 --> 0:01:05.200 other parts of the economy, you predict those to be 0:01:05.319 --> 0:01:09.160 flatted down. And so it's strong on an absolute basis 0:01:09.160 --> 0:01:11.280 relative of the United States history, and strong on a 0:01:11.319 --> 0:01:14.400 relative basis to the other economies. And that's because, frankly, 0:01:14.520 --> 0:01:18.840 the great American engine of capitalism, consumers are driving and 0:01:18.880 --> 0:01:21.240 the markets are valuing that future growth rate, and that's 0:01:21.240 --> 0:01:24.920 why they've been very, very constructive this year. 0:01:25.560 --> 0:01:27.720 How much of that engine that you talk about is 0:01:27.920 --> 0:01:30.759 AI investment, because that certainly is kicked in this year. 0:01:31.520 --> 0:01:33.800 How much of the growth is really attributable only to 0:01:33.880 --> 0:01:35.199 the AI investment. 0:01:36.840 --> 0:01:38.679 You know, I think you'd have to get people to 0:01:38.720 --> 0:01:40.840 parts of it. But for this year, frankly, the A 0:01:41.000 --> 0:01:43.200 investment has been building during the year. It is probably 0:01:43.280 --> 0:01:45.560 a bigger contributor next year in the years beyond. And 0:01:45.600 --> 0:01:47.960 so if you look at the data center build out, 0:01:47.960 --> 0:01:50.040 which is one of the ways that evidence itself, that's 0:01:50.080 --> 0:01:53.120 a big deal. If you look at customer or client spending, 0:01:53.200 --> 0:01:56.160 like US spending on AI that's hired it was last year, 0:01:56.200 --> 0:02:00.600 but frankly, overall spending levels are shifting towards that necessarily 0:02:00.640 --> 0:02:04.760 growing at a mid single digit rate type of numbers. 0:02:04.800 --> 0:02:07.440 So I think that's part why the reason we feel 0:02:07.440 --> 0:02:10.120 constructive for next year. We think AI spending continues. We 0:02:10.160 --> 0:02:15.880 think there's benefits the American taxpayer from tax rebates, lower 0:02:15.919 --> 0:02:18.639 taxes due to the tax bill going through and being 0:02:18.680 --> 0:02:22.160 effective for next year. And we think the expense expensing 0:02:22.200 --> 0:02:25.080 and other bonuses for businesses are good. So all that 0:02:25.160 --> 0:02:27.440 leads to our confidence that we go from basically at 0:02:27.480 --> 0:02:31.040 two percent type of growth letter level this year plus 0:02:31.080 --> 0:02:33.720 or minus up to two point four percent, which is 0:02:33.760 --> 0:02:35.640 all due to that. And AI is kicking and more 0:02:35.680 --> 0:02:37.960 and more, and so it's not all attributable to AI, 0:02:38.080 --> 0:02:40.400 but that's having a marginal impact that's pretty strong. 0:02:41.000 --> 0:02:43.400 So much of the American counomy is supported by the consumer, 0:02:43.440 --> 0:02:45.840 and you at Back of America have a really powerful 0:02:46.000 --> 0:02:49.280 viewpoint into the American consumer. How's the American consumer doing? 0:02:49.320 --> 0:02:51.480 Because it has been very strong. There have been some 0:02:51.560 --> 0:02:53.320 people saying it's starting to slow down. 0:02:55.200 --> 0:02:57.799 Yeah, and so I think you have to step back. 0:02:57.840 --> 0:03:01.040 We look at American consumers seventy million consumer putting four 0:03:01.040 --> 0:03:03.760 and a half trillion dollars plus into the American economy 0:03:03.760 --> 0:03:06.240 every year, and we've tracked the way that goes in 0:03:06.240 --> 0:03:08.640 the American countmy for many years. And so in the 0:03:08.680 --> 0:03:10.639 third quarter it was up about five percent of the 0:03:10.760 --> 0:03:13.160 last year. As we look at the fourth quarter here 0:03:13.240 --> 0:03:15.079 so far in October November, I'd say it in a 0:03:15.120 --> 0:03:16.720 four to four and a half percent, which is very 0:03:16.760 --> 0:03:20.400 consistent with a very solid growing economy. You know, at 0:03:20.400 --> 0:03:23.160 the end of the day, it's going to work against 0:03:23.160 --> 0:03:25.720 wage growth, and we see in the underlying consumers we 0:03:25.760 --> 0:03:28.200 have wage growth. Iw eive their paychecks are going up, 0:03:28.240 --> 0:03:30.760 and so the labor markets flattened out a little bit 0:03:30.760 --> 0:03:33.160 in terms of job growth and things like that. It's 0:03:33.240 --> 0:03:36.520 normalizing in terms of unemployment, but you still see underlying 0:03:36.560 --> 0:03:39.920 wage growth. So the American consumer spending at four percent 0:03:40.040 --> 0:03:43.240 more November this year versus November last year is a 0:03:43.320 --> 0:03:47.080 very solid backdrop. The credit quality American consumer is strong. 0:03:47.480 --> 0:03:50.040 And then you hear a lot about this discussion about 0:03:50.240 --> 0:03:53.360 different rates of growth among different income tursiles or third. 0:03:53.440 --> 0:03:54.240 So we look at. 0:03:54.120 --> 0:03:57.040 The bottom third, middle third, and top third American income 0:03:57.760 --> 0:03:59.440 people in the Bank of American customer base. 0:03:59.480 --> 0:04:00.480 We do see difference. 0:04:00.520 --> 0:04:03.360 Is I either higher income in middlecome are growing faster, 0:04:04.400 --> 0:04:07.760 but even the lower income third is still growing. 0:04:07.800 --> 0:04:08.840 And that's all good. 0:04:08.880 --> 0:04:11.560 And that means why is that true companies are employing 0:04:11.600 --> 0:04:14.360 people they're paying people now. The labor markets got a 0:04:14.400 --> 0:04:16.599 little soft, and as we look forward to a four 0:04:16.640 --> 0:04:20.920 point five four point six unemployment that is gotten worse, 0:04:20.960 --> 0:04:22.719 so to speak, than it was the beginning year. 0:04:22.760 --> 0:04:25.119 But frankly, this goes back to normalization question. 0:04:25.200 --> 0:04:27.719 If you look at the tenure average unemployment the twenty 0:04:27.760 --> 0:04:29.839 year to thirty year or forty year, it's five and 0:04:29.920 --> 0:04:32.200 six percent, you know, as you go back through time, 0:04:32.240 --> 0:04:34.279 and so a four and a half to four point 0:04:34.360 --> 0:04:38.520 six unemployment rate is a very strong relative unemployment rate. 0:04:38.520 --> 0:04:40.680 It's just a lot of years it's been below four 0:04:40.720 --> 0:04:42.440 and a half percent, has actually been in the last 0:04:42.440 --> 0:04:44.680 ten years. So people are very used to numbers now 0:04:45.000 --> 0:04:47.359 which were part of the tightness and labor in the 0:04:47.480 --> 0:04:51.479 twenty seventeen eighteen nineteen era, and you had the pandemic 0:04:51.560 --> 0:04:54.400 and it retightened, and so it's it's normalizing. But we 0:04:54.440 --> 0:04:56.799 feel good about all that, and the consumers in pretty 0:04:56.800 --> 0:04:59.839 good shape, spending more money, employed and earning more money, 0:05:00.160 --> 0:05:03.000 differences between different types of consumers and then being wise 0:05:03.040 --> 0:05:05.800 and how they spend if they trade down, and all 0:05:05.839 --> 0:05:07.880 the things you're hearing the retailers talk about. True, but 0:05:07.920 --> 0:05:10.440 the agurd amount of moving in the economy is still growing. 0:05:10.760 --> 0:05:14.680 So you mentioned flattening out in the employment growth. There 0:05:14.680 --> 0:05:16.960 are always risks to the upside and the downside, and 0:05:17.000 --> 0:05:19.360 any of the numbers that we project, how concerned are 0:05:19.400 --> 0:05:21.520 you let the downside, because certainly the FED is very 0:05:21.520 --> 0:05:24.560 focused on a softening a labor market and whether that 0:05:24.600 --> 0:05:25.680 may be a problem for us. 0:05:27.640 --> 0:05:30.160 So if you look at the predictions for our team 0:05:30.240 --> 0:05:33.440 and the other economists for unemployment, we're kind of peeking 0:05:33.480 --> 0:05:36.320 out at this level now, in the mid to four 0:05:36.480 --> 0:05:38.760 five four six range, and it sort of flattens out. 0:05:39.320 --> 0:05:41.560 But the FED has to be wary because they have 0:05:41.600 --> 0:05:44.159 a mandate to maintain full employment and we're at full 0:05:44.160 --> 0:05:46.480 employment now, and they have a mandate to main strip 0:05:46.560 --> 0:05:49.800 price stability and inflation fighting, and those two mandates can 0:05:49.880 --> 0:05:52.800 work together sometimes and against each other sometimes. Right now, 0:05:52.800 --> 0:05:55.320 we're in an unusual case where the labor market is 0:05:55.320 --> 0:06:00.240 getting has softened, and yet the inflation because of to 0:06:00.240 --> 0:06:03.240 build up inflation after COVID and stuff, is now still 0:06:03.240 --> 0:06:05.960 working its way down. Our team predicts that the inflation 0:06:06.080 --> 0:06:08.680 rate will get to the FEDCE target through the end 0:06:08.720 --> 0:06:11.320 of twenty seven, but it's continuing to work in the 0:06:11.360 --> 0:06:14.760 right direction, which gives the FED, in our view, latitude 0:06:14.800 --> 0:06:18.080 to keep cutting rates next year, especially in the first half. 0:06:18.120 --> 0:06:20.080 That will then provide a stimulus in the second half 0:06:20.120 --> 0:06:23.599 of the year. Those rate cuts do a benefit the 0:06:23.600 --> 0:06:27.640 consumer somewhat, but in fact benefit small businesses because in 0:06:27.720 --> 0:06:30.279 mid sized business they borrow on lines of credit, which 0:06:30.279 --> 0:06:32.760 are our floating rate into season. As rates come down, 0:06:32.800 --> 0:06:36.000 they get instantaneous benefit. And if you hear our small 0:06:36.080 --> 0:06:39.160 medium sized businesses, they're pretty optimistic about next year, telling 0:06:39.240 --> 0:06:42.640 us they expect to grow, they expect to hire more people, 0:06:43.440 --> 0:06:45.920 and those small businesses are backbone of the US economy. 0:06:45.920 --> 0:06:48.239 We're the largest small business letter in the US economy, 0:06:48.320 --> 0:06:49.800 so we see them being very active. 0:06:50.400 --> 0:06:51.880 This year has been good for the markets. It's also 0:06:51.960 --> 0:06:54.240 been good for back of America. I believe you hit 0:06:54.279 --> 0:06:56.600 an all time high in your stock price today intra 0:06:56.760 --> 0:06:59.320 day at least, what do you need in twenty six 0:06:59.640 --> 0:07:00.799 totinue the growth? 0:07:02.920 --> 0:07:04.920 Look, we just need our team that's done a great 0:07:05.000 --> 0:07:07.600 job for us over the last several decades. 0:07:07.160 --> 0:07:08.000 To keep doing it. 0:07:08.040 --> 0:07:09.520 And what they need to do is go out and 0:07:09.520 --> 0:07:11.120 get one more client and do one more thing with 0:07:11.160 --> 0:07:13.080 every client we have, and they know that across all 0:07:13.120 --> 0:07:15.600 of business, whether it's our markets teams, whether it's our 0:07:15.600 --> 0:07:18.320 global corporate investment bank teams, our consumer teams, are wealth 0:07:18.400 --> 0:07:20.320 managed teams, all of them need to go out and 0:07:20.360 --> 0:07:22.679 just drive more business and at a granite growth engine, 0:07:22.680 --> 0:07:25.920 which we described our Investor Day a while back, that 0:07:26.160 --> 0:07:28.760 is intact, it's been growing with the market and now 0:07:29.080 --> 0:07:31.200 because of some dynamics and a repricing and balance sheet, 0:07:31.240 --> 0:07:32.880 we'll get more earnings left out of it like we 0:07:32.920 --> 0:07:36.400 did in the third quarter. But that organic growth engine, 0:07:36.440 --> 0:07:39.160 more customers and war with each customers been driving a 0:07:39.200 --> 0:07:40.960 Bank of America, and our team just need to do 0:07:41.000 --> 0:07:41.320 more of that. 0:07:41.360 --> 0:07:42.200 And they know that. 0:07:42.440 --> 0:07:44.760 How sensitive is your performance at back of the RecA 0:07:44.960 --> 0:07:47.360 to what the Fed does on interest rates? I mean, 0:07:47.640 --> 0:07:50.480 if it actually cuts faster than people think or doesn't 0:07:50.520 --> 0:07:51.160 cut as fast. 0:07:53.320 --> 0:07:55.400 Look at the end of the day, if our team 0:07:55.440 --> 0:07:58.600 predicts and most of the economists out there predict that 0:07:58.680 --> 0:08:00.800 the Fed funds rate will go from where it is 0:08:00.840 --> 0:08:03.360 now down closer to three percent, and the debate might 0:08:03.360 --> 0:08:06.000 be two and three quarters three three in a quarter, 0:08:06.040 --> 0:08:09.080 but it's a debate that nominal rate environment from say 0:08:09.160 --> 0:08:11.240 three percent Fed funds rate to maybe a four to 0:08:11.320 --> 0:08:14.800 four and a half percent ten year treasury rate. That's 0:08:14.840 --> 0:08:18.200 a good normal interest rate curve where banks can do well, 0:08:18.240 --> 0:08:19.960 and our bank can do very well. We have a 0:08:20.480 --> 0:08:23.080 two trillion dollars of positis and a tradeon of those 0:08:23.440 --> 0:08:26.600 are low interest, low interest accounts, and if the nominal 0:08:26.680 --> 0:08:29.680 rate environment sits in around three percent, it's a very 0:08:29.720 --> 0:08:32.680 good environment for our company to grow it's earning streams 0:08:32.720 --> 0:08:35.040 while it's grown a customer and its balances and its 0:08:35.240 --> 0:08:36.200 deposits and loans. 0:08:36.440 --> 0:08:38.760 You originally had an investor's day and you went through 0:08:38.800 --> 0:08:41.319 in that your investment in tech, which as I recall 0:08:41.440 --> 0:08:44.240 is ten billion dollars over ten years, one billion dollars 0:08:44.280 --> 0:08:46.360 in this year alone. What did you get for that? 0:08:46.440 --> 0:08:48.400 How do you monitor the return on investment of that 0:08:48.520 --> 0:08:49.480 kind of tech investment? 0:08:51.280 --> 0:08:54.000 Yeah, So each year we have about thirteen billion dollars 0:08:54.040 --> 0:08:57.719 in total tech spending, about nine to ten nine or 0:08:57.800 --> 0:09:01.520 so of it is the running of thevironment, protecting the environment, 0:09:01.600 --> 0:09:03.440 and sort of what they call the infrastructure, both the 0:09:03.480 --> 0:09:09.079 systems and protecting those systems, and new software purchases about 0:09:09.080 --> 0:09:12.120 four billions what we call initiatives, and that's the new products, 0:09:12.200 --> 0:09:14.840 new services, the things my teammates love to talk about 0:09:15.080 --> 0:09:16.640 and what do we get for how do we measure? 0:09:16.720 --> 0:09:18.760 We literally look at every project we do and say, 0:09:18.840 --> 0:09:22.600 what's the payback in terms of additional revenue, additional expense 0:09:22.720 --> 0:09:26.280 or simplicit expense taken out of either reducing work or 0:09:26.559 --> 0:09:28.200 simplicity new systems environment. 0:09:28.440 --> 0:09:30.040 So we measured all that. It's got to be above 0:09:30.040 --> 0:09:30.800 our cost of capital. 0:09:30.800 --> 0:09:32.640 That's a technical way of measure, but what you really 0:09:32.679 --> 0:09:36.480 see is that deployment of lots of capabilities to help 0:09:36.520 --> 0:09:40.520 our customers do much greater things with AI, with agents 0:09:40.520 --> 0:09:42.560 and all the things working on but also our teammates 0:09:42.559 --> 0:09:43.320 to do great things. 0:09:43.320 --> 0:09:47.360 So this year we deployed our three sixty five co pitt. 0:09:47.400 --> 0:09:48.960 We'll finish the end of the year with two hundred 0:09:49.000 --> 0:09:51.600 thousand people up and operating on AI and it's just 0:09:51.640 --> 0:09:54.240 tremendous And that's all part of that major tech budget. 0:09:54.280 --> 0:09:56.080 But also as part of that is just the nuts 0:09:56.120 --> 0:09:59.840 and bolts of having a better trading system or enhancing 0:09:59.840 --> 0:10:03.080 that trading system our data. So that four billion plus 0:10:03.160 --> 0:10:05.400 a year is really important to drive the initiatives that 0:10:05.440 --> 0:10:06.880 we have as an innovation company. 0:10:07.440 --> 0:10:09.760 So we are in the early stages of AI, even 0:10:09.760 --> 0:10:11.600 though you've been doing at Bank of America for a while. 0:10:11.600 --> 0:10:13.319 Now, how far. 0:10:13.280 --> 0:10:15.360 Will this go for Bank of America? What will Bank 0:10:15.400 --> 0:10:18.360 of America look like five years down the road because 0:10:18.360 --> 0:10:20.720 of AI? How transformed will it become? 0:10:22.800 --> 0:10:25.920 Well, I think to answer that question, no one knows 0:10:25.960 --> 0:10:28.240 precisely for sure. But what you will know is we'll 0:10:28.280 --> 0:10:31.680 be applying more and more of automated intelligence or augmented 0:10:31.720 --> 0:10:35.840 intelligence as we call it, with a person using AI 0:10:36.080 --> 0:10:38.880 using that to be more effective, and that'll affect all 0:10:38.920 --> 0:10:42.000 the businesses. So if you look historically, we deployed AI 0:10:42.280 --> 0:10:45.439 more than five years ago with a product called Erica. 0:10:45.679 --> 0:10:48.959 Erica was a agent, bought a small language model, and 0:10:49.000 --> 0:10:50.920 all the words we use today back then we didn't. 0:10:51.040 --> 0:10:54.280 And over the last twenty four hours, Erica interfaced with 0:10:54.320 --> 0:10:57.720 two million Bank of America consumers and answer the questions. 0:10:57.840 --> 0:11:00.280 It went from two hundred questions that could answer about 0:11:00.280 --> 0:11:02.760 seven hundred question can answer about twenty million people use it. 0:11:02.800 --> 0:11:05.000 So we have great experience of how that worked. 0:11:05.120 --> 0:11:06.960 But what part of that experience was you have to 0:11:06.960 --> 0:11:09.400 have your data perfect, you have to have the controls 0:11:09.400 --> 0:11:11.680 around it, so answer the question right. So the customer 0:11:11.760 --> 0:11:13.640 is getting a good answer, and you have to be 0:11:13.640 --> 0:11:18.600 able to transmit that answer instantaneously on an inquiry across 0:11:18.640 --> 0:11:20.679 the one hundred systems that touch our mobile bank or 0:11:20.720 --> 0:11:24.199 digital banking out to the customers. So it's a lot 0:11:24.240 --> 0:11:24.800 harder to do. 0:11:25.000 --> 0:11:25.200 Now. 0:11:25.679 --> 0:11:27.520 The interesting thing is we took that Erica and we 0:11:27.559 --> 0:11:30.040 put it in our institutional side business, so cash pro 0:11:30.160 --> 0:11:34.559 with Erica and hundreds of thousands of interactions with institutional 0:11:34.600 --> 0:11:37.480 customers using it to answer questions about their accounts. Then 0:11:37.520 --> 0:11:39.360 you took it and put it in an internal environment 0:11:39.400 --> 0:11:41.400 so people could work with the IT department to get 0:11:41.440 --> 0:11:45.160 their laptops replaced or passwords change. So we use that 0:11:45.240 --> 0:11:47.760 model plus other models, and we believe it has a 0:11:47.760 --> 0:11:50.640 big impact. Where exactly it goes we'll figure out, but 0:11:50.720 --> 0:11:52.880 what we know there'll be more of it. It'll be 0:11:52.880 --> 0:11:56.280 helping people be smart and more efficient, help us take 0:11:56.360 --> 0:11:58.120 work out that we can get out and invest in 0:11:58.320 --> 0:12:01.120 work that helps our customers and our teammate be more successful. 0:12:01.440 --> 0:12:03.679 And we are after it every day, and we have 0:12:04.040 --> 0:12:07.280 thirty proofs of concept going. We have money we're spending 0:12:07.320 --> 0:12:08.880 and all that stuff, but a lot of this is 0:12:08.920 --> 0:12:12.240 really fairly controlled, right now to make sure that we 0:12:12.240 --> 0:12:14.440 can actually deliver what we say when we put a 0:12:14.520 --> 0:12:16.400 and I, we just can't let it run and have 0:12:16.440 --> 0:12:18.720 answers that customers won't have faith in. And that's why 0:12:19.160 --> 0:12:20.839 it'll be a little slower build out there, I think 0:12:20.840 --> 0:12:23.160 people see, but a very relentless build out. 0:12:23.200 --> 0:12:25.400 From your experience so far, and once you project out, 0:12:25.559 --> 0:12:27.760 when you look at the return on that investment AI, 0:12:27.960 --> 0:12:29.880 how much it's from growing the top line that is 0:12:30.120 --> 0:12:32.839 increasing revenue, and how much of it is from cost 0:12:32.880 --> 0:12:34.240 savings because of the use of AI. 0:12:36.559 --> 0:12:38.680 I think when you look at it in the very 0:12:38.720 --> 0:12:42.720 near term, it's mostly about process engineering, so embedding AI 0:12:42.800 --> 0:12:45.720 and the discrete process to take out work and that 0:12:45.760 --> 0:12:48.200 we've been doing for years for several years, so we 0:12:48.240 --> 0:12:50.800 see it. And before that we have machine learning and 0:12:50.840 --> 0:12:55.280 other digital digitization, and that was a capability that we built, 0:12:55.280 --> 0:12:58.160 but also the customer would use and that's an operative 0:12:58.240 --> 0:13:00.520 term here, as a customer has to use the use 0:13:00.600 --> 0:13:03.720 the techniques and things that we build. I think over 0:13:03.800 --> 0:13:08.760 time it'll be much more about enhancing the revenue side. 0:13:08.800 --> 0:13:10.520 And so if you look at our proofs to cons 0:13:11.040 --> 0:13:13.400 our projects going in and out proofs the concept, then 0:13:13.480 --> 0:13:16.959 more implemented. We have a relationship management preparation tools or 0:13:17.040 --> 0:13:19.560 pitch book preparation tools that allow us to do more 0:13:21.040 --> 0:13:24.600 faster turnaround, better preparation for meetings, better idea generation for 0:13:24.679 --> 0:13:26.760 meetings with clients, and we know that I will generate 0:13:26.800 --> 0:13:30.800 additional revenues. So there's equal parts revenue and expense in 0:13:30.840 --> 0:13:33.920 the last twenty four months, twelve months. You know it 0:13:34.040 --> 0:13:35.920 even go back to Erika starts three or four or 0:13:35.920 --> 0:13:38.439 five years ago. Whatever it started, it was more about 0:13:38.480 --> 0:13:41.240 removing tasks and costs. I think that's moving because people 0:13:41.280 --> 0:13:43.680 are getting more comfortable with this ability to answer questions 0:13:43.679 --> 0:13:45.960 and help them prepare for a meeting with a client, 0:13:46.320 --> 0:13:48.000 and you know what they need to think about, whether 0:13:48.000 --> 0:13:50.559 it's a wealth manager client or a commercial banking client. 0:13:51.400 --> 0:13:54.680 Including banking. Going beyond that in general to our economy, 0:13:54.679 --> 0:13:57.319 because AI appears to be being transformed, and goodness dooes, 0:13:57.320 --> 0:14:00.240 there's hundreds of billions of dollars being invested. Can we 0:14:00.280 --> 0:14:03.240 get the return investment as an economy without cutting a 0:14:03.240 --> 0:14:03.880 lot of jobs. 0:14:06.600 --> 0:14:09.640 I think the question will be, you know how fast 0:14:09.720 --> 0:14:11.720 the jobs will grow around and the new jobs are 0:14:11.720 --> 0:14:13.280 growing to shift of jobs, So if you look, in 0:14:13.320 --> 0:14:16.199 the last fifty years or so, we had a lot 0:14:16.240 --> 0:14:18.400 of technology come in, and we have twice as many 0:14:18.400 --> 0:14:20.880 people work in the US and we did fifty five 0:14:20.960 --> 0:14:23.960 years ago. So think about David, in our lifetimes, what 0:14:24.000 --> 0:14:27.000 we've seen. You know, we've seen the desktop computer, to 0:14:27.000 --> 0:14:29.720 the laptop computer, to the phone as a computer, et cetera. 0:14:29.760 --> 0:14:31.920 And think of all that technology coming in and we 0:14:31.920 --> 0:14:34.840 employed twice as many people. So the question will be, well, 0:14:34.840 --> 0:14:37.040 you have more people doing different types of jobs. And 0:14:37.080 --> 0:14:39.840 so my advice to myself and my advice to my 0:14:39.840 --> 0:14:42.600 teammates is simple, learn it, harness it, make it your 0:14:44.080 --> 0:14:46.520 agent to help you be more successful. And yes, does 0:14:46.520 --> 0:14:49.280 it change the human content of work in areas like 0:14:49.360 --> 0:14:53.080 finance and audit and legal that we hadn't done it before. Yes, 0:14:53.160 --> 0:14:55.360 But the people use it effectively will be able to 0:14:55.400 --> 0:14:58.240 do more and generate more revenue and then potentially generate 0:14:58.280 --> 0:15:00.760 more jobs out there because people there are more people 0:15:00.760 --> 0:15:02.840 are the more money, spending more money. America is making 0:15:02.920 --> 0:15:05.400 more money. It should all be good, but it's going 0:15:05.440 --> 0:15:07.360 to be an interesting transition. 0:15:08.120 --> 0:15:10.680 Brian As, CEO of Bank of America. An important part 0:15:10.680 --> 0:15:13.160 of your job, maybe the most important part is managing risk, 0:15:13.360 --> 0:15:16.280 upside risk, downside risk. As you look at the risks 0:15:16.320 --> 0:15:18.760 out there, how do you manage, if at all, for 0:15:18.960 --> 0:15:22.240 the risk that in fact we're over investing in AI 0:15:22.520 --> 0:15:23.920 as an economy. 0:15:25.560 --> 0:15:26.880 Well, I think it's an economy. 0:15:26.960 --> 0:15:29.200 The issue would be if it got overheated and it retracted, 0:15:29.800 --> 0:15:31.880 what would the impact flow for us as a company 0:15:31.920 --> 0:15:35.520 more into consumers, job loss, things like that. And right 0:15:35.520 --> 0:15:38.160 now we see that as being relatively limited because it's 0:15:38.200 --> 0:15:40.440 a narrow a group of companies and there a group 0:15:40.440 --> 0:15:43.560 of spending and the companies are spending and have a 0:15:43.600 --> 0:15:45.480 lot of money. As a lender, we look at the 0:15:45.560 --> 0:15:48.000 leverage on these projects and make sure that we're comfortable 0:15:48.080 --> 0:15:50.240 that in the duration of the contract by the person 0:15:50.280 --> 0:15:53.800 who's going to commit to use the data the data 0:15:53.800 --> 0:15:56.440 center and therefore that's the revenus room. You think about 0:15:56.840 --> 0:15:58.560 the tenant, for lack of a better term, the quality 0:15:58.600 --> 0:16:00.280 that tenant, the link to that tenant. 0:16:00.280 --> 0:16:02.560 Those are dishes. So we look at all that. 0:16:02.840 --> 0:16:05.520 It's the market valuations, you know, our team thinks that 0:16:05.600 --> 0:16:08.160 you'll see, you know, you could could see a debate 0:16:08.200 --> 0:16:12.000 about the over whether the AI stalks are overvalued undervalued. 0:16:12.040 --> 0:16:14.680 Our team talks about that, but what people are forgetting 0:16:14.720 --> 0:16:17.080 is there's a lot of other companies are coming in 0:16:17.120 --> 0:16:19.480 and producing more and more earnings growth. At the end 0:16:19.480 --> 0:16:21.240 of the day, the earnings growth is what will drive 0:16:21.240 --> 0:16:23.640 the market, and so it may move around. But as 0:16:23.920 --> 0:16:27.480 Chris Heise, our teammates, has said on your UH Blueberg 0:16:27.520 --> 0:16:30.120 and other places, you know it's a proud bull. He 0:16:30.160 --> 0:16:32.400 thinks you know that it's a The market ahead is 0:16:32.480 --> 0:16:34.840 very constructive and our team has you know, a mid 0:16:34.920 --> 0:16:37.560 single digit S and P growth predicted for next year. 0:16:37.880 --> 0:16:39.760 So, Brian, one last question is we head into the 0:16:39.800 --> 0:16:43.440 holidays and into the new year, what's the biggest upside 0:16:43.520 --> 0:16:44.920 risk that you see in the new year. 0:16:47.480 --> 0:16:50.840 Well, I think the risk is that the upside put 0:16:50.880 --> 0:16:54.400 potential is for the series of policies that have come 0:16:54.440 --> 0:16:59.400 out taxation, UH, trade and tariff, immigration and deregulation. I 0:16:59.400 --> 0:17:01.240 think the biggest one is still yet to come for 0:17:01.320 --> 0:17:04.439 businesses a deregulation piece and it's falling into place, and 0:17:04.480 --> 0:17:06.920 if that works the right way, then you'll see the 0:17:07.000 --> 0:17:10.680 US kick another level of potential growth. And when the 0:17:10.800 --> 0:17:13.040 US kicks and growth, the world will have growth. Because 0:17:13.080 --> 0:17:14.879 the end of the day, our economy is the biggest 0:17:14.880 --> 0:17:17.679 economy with the biggest consuming economy, and so if our 0:17:18.119 --> 0:17:21.480 if our citizens are employed, working and earning more money, 0:17:21.480 --> 0:17:22.600 that's good for the world. 0:17:23.200 --> 0:17:25.320 Is there any downside at all because of the uncertaint 0:17:25.320 --> 0:17:27.000 about policy because it's moved around a bit. 0:17:29.160 --> 0:17:32.199 There has been a lot this year, honestly, and if 0:17:32.240 --> 0:17:35.240 you talk to our small business customers for example, and 0:17:35.280 --> 0:17:39.719 the most recent surveys, they're now getting an understanding how 0:17:39.720 --> 0:17:41.280 the tariffs are going to affect them. It took a 0:17:41.280 --> 0:17:43.640 while for them to settle in and they can see 0:17:43.640 --> 0:17:46.160 the ten fifteen to twenty percent level and they're adjusting 0:17:46.200 --> 0:17:48.880 for their adjusting supply chains. That's still work going on, 0:17:49.040 --> 0:17:51.880 and the ability to pass through those costs and things 0:17:51.960 --> 0:17:55.480 like that is coming through the system now. Their biggest worry, 0:17:55.560 --> 0:17:58.359 what they tell us, is to get employees, and that 0:17:58.480 --> 0:18:01.000 has a bit to do with settling in on the 0:18:01.000 --> 0:18:04.439 immigration policy. And it's sort of getting more precise in 0:18:04.480 --> 0:18:06.919 the minds of a small business owner a mid sized company, 0:18:06.920 --> 0:18:10.000 can I have the labor availability that I need? And 0:18:10.040 --> 0:18:12.520 so that issue I think is straightening out as the 0:18:13.200 --> 0:18:18.720 precision of the work on immigration policy continues through, you know, 0:18:18.760 --> 0:18:21.840 and that was probably more on the minds this year 0:18:21.920 --> 0:18:24.840 as that settles in and the trade policies have settled 0:18:24.840 --> 0:18:27.440 in during the course of the summer. I think they're 0:18:27.440 --> 0:18:30.040