Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Jamie, we're talking about the fact that you have lent
Speaker 2: into technology over the last decade, billions of dollars invested
Speaker 2: across the business. When it comes to AI, which parts
Speaker 2: of the JP Morgan business are they'll be most transformed
Speaker 2: by AI.
Speaker 1: So we already we've been doing AI since twenty twelve.
Speaker 1: So people think it's a new thing. Jen AI is
Speaker 1: kind of new, but not all of it. We have
Speaker 1: two thousand people doing it, spend two billion dollars a.
Speaker 3: Year on it.
Speaker 1: It affects everything risk, fraud, marketing, idea generation, customer service,
Speaker 1: and it's kind of the tip of the iceberg. And
Speaker 1: so we know we're deploying it. Every time we meet
Speaker 1: us a business, we ask what are you doing? What
Speaker 1: are you doing to serve your people? Why can you
Speaker 1: do better? What are somebody else doing? So we're freely
Speaker 1: deploying it and safely. We have a lot of rules
Speaker 1: and regulations in place in our own data and how
Speaker 1: we use it, et cetera.
Speaker 2: Is it having a material impacts on revenues for JP Morgan?
Speaker 2: If not now, then when so we have.
Speaker 1: Shown that for that for two billion of expense. We
Speaker 1: have got two billion of benefit. We actually can do
Speaker 1: real detail.
Speaker 3: We did this.
Speaker 1: We wereduced headcount, we saved this time and money. We'duced areas.
Speaker 1: Some of you can't. It's just improved service something like that.
Speaker 1: It's like almost worthwhile worthless to say what's the MPV.
Speaker 1: But we know about two billion dollars of actual cost saves.
Speaker 1: And I think it's the tip of the iceberg. You
Speaker 1: were getting better and better at it. We know how
Speaker 1: to do it. As the managers learn how to do it,
Speaker 1: they're asking more questions why can't it do X? And
Speaker 1: why can't do yx? And then were on on my phone.
Speaker 1: Here we have a suite and all I'm sweet on
Speaker 1: internal data to do research and summarize reports and you know,
Speaker 1: scan contracts and do things like that.
Speaker 3: One hundred and fifty thousand.
Speaker 1: People a week use it, so it's it's quite productive.
Speaker 2: More and more of your employees are using the agentic
Speaker 2: AI our.
Speaker 1: Own our own LLM, and Igentic is just starting, you know,
Speaker 1: but that will be deploying over time too. But it's
Speaker 1: also been used for coding. I mean, it's it's being
Speaker 1: used quite broadly now. And like I said, part of
Speaker 1: is getting your mind working around how you're going to
Speaker 1: use this thing, and so our managers and leaders.
Speaker 3: Have to do it.
Speaker 2: If you look out five years, are there more jobs
Speaker 2: in banking as a result of AI or fewer?
Speaker 1: Look I think is I think people shouldn't put the
Speaker 1: head in the sand. It is going to affect jobs.
Speaker 1: So think of every application, every every service you do,
Speaker 1: will you'll be using AI, some to enhance it, some
Speaker 1: of it will be you doing the same job, You're
Speaker 1: doing a better job at it. There will be jobs
Speaker 1: that it eliminates, but you're better. Have been way ahead
Speaker 1: of the curve and retraining people, so we train and
Speaker 1: redeploy a lot of people. So for JP Moore, if
Speaker 1: we're successful, we'll have more jobs, but there'll probably be
Speaker 1: less jobs and certain functions.
Speaker 2: When you look at the spend on AI infrastructure, chips open, AI,
Speaker 2: not lost, not making a profit, loss making. Dales have
Speaker 2: about of trillion dollars this year. The hyper scale is
Speaker 2: to spend there. What is your reaction when you see
Speaker 2: those numbers crossing? Are you comfortable with that kind of
Speaker 2: spend on the infrastructure around AI.
Speaker 3: It's a lot.
Speaker 1: I'm not sure it's all ever going to be totally spent.
Speaker 1: When you look at big tech, like tech that happens
Speaker 1: like this and you're go look at cars, you click
Speaker 1: at television, you click at internet. Big money's got spent.
Speaker 1: There were a lot of losers, a lot of winners.
Speaker 1: In total, it was productive. So take even take the
Speaker 1: Internet bubble and remember that blew up and amount of
Speaker 1: p I can united by the name one hundred companies
Speaker 1: that you know were worth fifty billion dollars and disappeared.
Speaker 1: But out of it came Facebook, YouTube, Google, you know.
Speaker 1: So there will be real big companies with real big success.
Speaker 1: It will work inspite of the fact that not everyone
Speaker 1: who invested in it is going to have a great
Speaker 1: investment return.
Speaker 2: And of course those investments are part of what is
Speaker 2: powered this bull market in stocks. And on Sunday it
Speaker 2: will be three years of that ballmark. Where do you
Speaker 2: think we are in that ball market? Is this Is
Speaker 2: there any complacency there? Is it underpinned by rational factors?
Speaker 2: Is there more momentum?
Speaker 3: Yeah? You know, look, we're in a ball market.
Speaker 1: It has been clear as a price or high credits,
Speaker 1: breads a low consumers. Still okay, the consumer has jobs.
Speaker 1: Remember the jobs, jobs jobs. That usually starts to force
Speaker 1: people to cut back and change staying a consumers spend
Speaker 1: lesson companies cut back.
Speaker 3: So far, so good. There are a lot of issues.
Speaker 1: Out there that you know, the economy's got to deal
Speaker 1: with from all this geopolitical stuff, maybe they'll sort well.
Speaker 3: Which could happen.
Speaker 1: Inflation, I'm a little more nervous about inflation not coming
Speaker 1: down like people expect. That might be a surprise. And
Speaker 1: then in the hand there's a lot of spending. There's
Speaker 1: a lot of government spending which is inflationary too, by
Speaker 1: the way.
Speaker 3: And so look, I don't know. I hope for the best,
Speaker 3: plan for the worst.
Speaker 2: And you don't worried about a recession in twenty twenty six
Speaker 2: for the US you might not clear.
Speaker 1: Yes, I think it could happen in twenty twenty six.
Speaker 1: I just I'm not worried about it. As a different statement,
Speaker 1: we'll deal with it, We'll serve our clients will navigate
Speaker 1: through it. A lot of it has been through them before.
Speaker 1: You don't wish it because you know certain people get hurt.
Speaker 1: But it could happen in.
Speaker 2: Twenty twenty what's still a coose in the US government
Speaker 2: shot down, But I.
Speaker 1: Do think they're positives, like deregulations are real positive which
Speaker 1: also helps animal spirits that are positive. And you know
Speaker 1: in the one big beautiful build is also more stimulus
Speaker 1: that has positive for the economy, but maybe negatives for inflation.
Speaker 3: So how it all sorts.
Speaker 2: Out, We'll see markets are looking through the US government shutdown.
Speaker 2: Is there a period of time if this shutdown continues
Speaker 2: where markets start to wake up and become concerned?
Speaker 3: I don't think so. Look, I don't like shutdowns.
Speaker 1: I think it's just a bad idea, and I don't
Speaker 1: care what the Democrats republics say.
Speaker 3: It's a bad idea. It's not a way to run
Speaker 3: a railroad.
Speaker 1: I don't think it's critic We've had I forgot the
Speaker 1: number four or five or six. You know, one of
Speaker 1: them went for thirty five days. I'm not sure anyone
Speaker 1: really affected the economy the market in a real way.
Speaker 2: You mentioned inflation. You said you're a little bit more
Speaker 2: concerned about inflation than maybe some others. Markets pricing in
Speaker 2: about a hundred basis points of cuts between now and
Speaker 2: this time next year from the Fed. Does that therefore
Speaker 2: seem reasonable to you? Or markets are over their skis
Speaker 2: in pricing.
Speaker 1: I think, you know, markets have to make a forecast.
Speaker 1: I want to point out that forecasts have almost always
Speaker 1: been wrong, and the Fed's been wrong too, so it
Speaker 1: doesn't like their forecast is you know, going to be
Speaker 1: accurate if inflation does go up, starts ticking up for
Speaker 1: whatever reason, and it might you know, it's gonna be
Speaker 1: hard to do one hundred points.
Speaker 3: They might do some, you know, and then they.
Speaker 1: Have the battle, you know, the give and take of
Speaker 1: if employer starts going up, we obviously gonna do some.
Speaker 2: So we'll say you've long talked about geopolitics as being
Speaker 2: a risk factor. We're seeing gold at four thousand dollars.
Speaker 2: We're seeing bitcoin at record highs. The dollar, though yet
Speaker 2: to date, down about eight percent on the Bloomberg Dollar Index.
Speaker 2: Are you staying structural shifts out of the US dollar?
Speaker 2: And is that sustained theme.
Speaker 3: A little bit?
Speaker 1: But again I wouldn't have heart burned over it. The
Speaker 1: dollar did well for a long time if you own
Speaker 1: US stocks, So foreigners owned something like thirty five trillion
Speaker 1: dollars of US docks and bonds. And because this dock
Speaker 1: mark's gone up, your allocation the US has gone up.
Speaker 1: I think it's perfectly reasonable for investment committees in Europe
Speaker 1: and around the world to cut back a little bit
Speaker 1: of their equity ownership. We've also seen people changing their
Speaker 1: hedge ratios and stuff like that, so it may just
Speaker 1: be a rational adjustment to you know, I don't expect
Speaker 1: a stronger dollar the tariffs has this effect, but it's
Speaker 1: still if you look at America's still the greatest place.
Speaker 2: In the world to invest in long term and deal
Speaker 2: making seems to be picking up, and of course JP
Speaker 2: Morgan played a significant role in the takeover. The take
Speaker 2: private of EA twenty billion dollars in financing provided by
Speaker 2: JP Morgan. Is that a marker in the sand?
Speaker 3: Is that?
Speaker 2: Is that a one off as a deal of that
Speaker 2: type or is it a sign of a more competition
Speaker 2: between frankly, the banks and private credit.
Speaker 1: Well, we're agnostic about private credits, so there maybe competitions
Speaker 1: or not. We want our customers to do with their interests.
Speaker 1: We work for both, you know, and we did that
Speaker 1: whole deal in eleven days, and we didn't do it
Speaker 1: that way to make a point to private credit, you know,
Speaker 1: Dave said do it differently, and we could have done
Speaker 1: it differently too, and so. But there's a lot of
Speaker 1: merger talk, there's a lot of firepower, there's a lot
Speaker 1: of tech. You know, we had a bunch of IPOs
Speaker 1: in the US. I know they've only been a handful here.
Speaker 1: The tech world is still doing quite well. You know,
Speaker 1: the eight hundred companies here, I think it was four
Speaker 1: hundred last year. You know, we have five hundred bankers
Speaker 1: coming the innovation economy globally around the world, including edit
Speaker 1: like fifty your loan here. So you know, look, I'm
Speaker 1: the long term optimist. I do think acid prices are high,
Speaker 1: credits breds are low, and you know you should take
Speaker 1: that in consideration how you think about the future.
Speaker 3: When you talk about credit and you talk about debt.
Speaker 2: I'm thinking of some dates in fact that JP Morgan
Speaker 2: put out on auto loans biggest losses in the most
Speaker 2: recent months, I think since twenty twenty March of twenty twenty.
Speaker 2: Is that idiosyncratic to auto that means in the US
Speaker 2: or you seeing other weak links being stressed.
Speaker 1: I think you know, there were one or two frauds
Speaker 1: which I won't go through, but in general, consumer credit
Speaker 1: was so good. It's basically most of us just normalizing
Speaker 1: for both credit card but subprime order is a little
Speaker 1: bit worse than normalizing. It doesn't look like it's getting
Speaker 1: worse mirror, but it might.
Speaker 3: But a lot of that.
Speaker 1: If you look at the history of credit for consumers,
Speaker 1: it's employment is when employment or home prices go way down,
Speaker 1: which you know we don't maybe not expect that, that
Speaker 1: drives you know, credit.
Speaker 2: The administration is talking about possibly challenging the requirement around
Speaker 2: quarterly earnings, and you've talked about this, You've written about
Speaker 2: this bor and Buffett around the guidance part of earnings
Speaker 2: and quarterly guidance. Would you welcome a change like that
Speaker 2: and would it mean a change to JP Morgan in
Speaker 2: terms of how often.
Speaker 3: You Yeah, I would welcome in.
Speaker 1: We still play update investors quarterly with much less stuff,
Speaker 1: and we just very transparent. I think the bigger problem
Speaker 1: was just reporting quarterly. It was forecasting, where you know,
Speaker 1: CEOs get their backup against the wall. They have to
Speaker 1: meet these things earnings and they start doing dumb stuff
Speaker 1: to meet earnings, and that kind of public pressure. I
Speaker 1: think it's a smaller part of a much bigger problem.
Speaker 1: We've gone from eight thousand public companies in nineteen ninety
Speaker 1: six to like four thousand today, and you know that
Speaker 1: I'm not actually as good. We drive companies out of it.
Speaker 1: We have cookie cutter governance. There are some activists are good,
Speaker 1: but they're activists. There's litigation, there's cookie cutter compensation, there's
Speaker 1: very expensive listing. There's disclosure rules, which you've heard about
Speaker 1: them here, I mean endless rules, and that it makes
Speaker 1: it hard.
Speaker 3: For a small cut to go public.
Speaker 1: So I think, and they're trying to do that here,
Speaker 1: have an active small company going public. You all need
Speaker 1: and create an equity culture, which Rachel Reason is trying
Speaker 1: to do here. And I think they're doing a good
Speaker 1: job reducing regulations, you know, trying to make it easier
Speaker 1: to do business and you know, reducing regular banks, but
Speaker 1: also in business in general, you want an active market
Speaker 1: and we've kind of crushed it and could the research
Speaker 1: laws and miffit and disclosure requires it. So if I
Speaker 1: was a regulator, I would take a step back and
Speaker 1: look at the whole system and say, how can we
Speaker 1: improve it and make it safer, you know not and
Speaker 1: look at it holistically as opposed to know just everything's
Speaker 1: like a one off conversation.
Speaker 2: I need to talk to you about some other changes
Speaker 2: that the Trump administrations take. You are a champion of
Speaker 2: capitalism and free market capitalism. So when you see states
Speaker 2: taken by the administration or the US government's put it
Speaker 2: that way in terms of intel golden share for US
Speaker 2: steel investments in the lithium mind producer, how does that
Speaker 2: sit with you?
Speaker 1: So the first thing is there are legitimate complaints around trade.
Speaker 1: So just take that first somewhere around just unfair trade.
Speaker 1: It's unfair to use, you know, not just tariffs. It's surpluses,
Speaker 1: it's capital, it's quotas, it's just you know, it's the
Speaker 1: non tariff parers. And then there's national security related so
Speaker 1: I think a national security you have to take some
Speaker 1: special thing I called industrial policy.
Speaker 3: But it's not to be done right.
Speaker 1: It's got to come with permitting no virtual signaling. And
Speaker 1: so like the deal it was done for MP, I
Speaker 1: thought they did a very smart thing. They're giving MP
Speaker 1: which we were part of banking. You know, it does
Speaker 1: rare Earth's magnets a chip because they're gonna have a
Speaker 1: long term contract with the government. It gives them a
Speaker 1: chance to survive, to get through it. They call the
Speaker 1: Value of Death, and they bought a piece to go
Speaker 1: into it. So I thought that was really well done.
Speaker 1: I'm not going to comment all of them. I think
Speaker 1: it'd be very careful when you get involved in that
Speaker 1: kind of stuff.
Speaker 3: Why are you doing it? What's the long term benefit?
Speaker 3: You know?
Speaker 1: And then of course you know if Democrats get in powered,
Speaker 1: they're gonna do even more of it, So I would
Speaker 1: be very cautious about how you go about that. I
Speaker 1: do think they need to do more. You cannot do
Speaker 1: certain things in the United States. You think a company's
Speaker 1: gonna do it, they'll be They'll be bankrupt in seven months.
Speaker 1: They either need freelam and cheaper financing. And maybe the
Speaker 1: most important is long term purchase agreements with defense or
Speaker 1: company to something that gives me a real chance to.
Speaker 3: Build a business.
Speaker 2: You touch on the fact that we're here in the UK,
Speaker 2: the chance a little here. She addressed the summit, she
Speaker 2: dress the conference, she's making those changes. Is the UK
Speaker 2: doing enough? They're going to be potentially some changes when
Speaker 2: it comes to listings. They may be announced in the
Speaker 2: budget in November. Is enough being done to make the
Speaker 2: UK to make London an attractive listing destination again.
Speaker 1: Well, at first of all, it's come here. It's a
Speaker 1: wonderful city. It's a melting pot. The brain power is extraordinary,
Speaker 1: and I'm talking about not just financial but lawyers and technology, media.
Speaker 1: It's it's unbelievable. It's a huge benefit to your to UK,
Speaker 1: though I'm not sure the rest of the UK appreciates
Speaker 1: that much. And they are there's saying the right things.
Speaker 1: They're deregging. It's not just banks but business in general,
Speaker 1: reducing red tape. I call it blue tape. Now you
Speaker 1: know they're reducing red tape, blue tape.
Speaker 3: They're you know, they're.
Speaker 1: Trying to create a consolidate the pension and save these schemes.
Speaker 1: So I think it's very smart have a little more
Speaker 1: of an equity risk culture, you know, not to lose money,
Speaker 1: but to take a little more risk. And maybe some
Speaker 1: of these tech companies here. Yeah, I apployed everything they're doing.
Speaker 1: I know the you know, the public here doesn't applaud
Speaker 1: as much as I do. But they have to keep going.
Speaker 2: H one B visas in the US talking about attracting
Speaker 2: talent one hundred thousand dollars, is that a barrier to
Speaker 2: the US tech sector.
Speaker 3: You concerned about it, I'm not. Again. I've got Harpero.
Speaker 3: It's six hundred thousand employees. That's it.
Speaker 1: We have one hundred and sixty million people working. And
Speaker 1: I do think you know, these things happened. I didn't
Speaker 1: like when I first. I still don't particularly like it,
Speaker 1: but but you know what it was being abused. We
Speaker 1: did the analysis and the work. It was not supposed
Speaker 1: to be to bring cheaper workers here to make more
Speaker 1: money for your company. It was meant to bring very
Speaker 1: talented people and you don't necessarily have to for your company,
Speaker 1: and we do. We may have made some mistakes, but
Speaker 1: let's just fix the system. I was with the President
Speaker 1: once and he said, more merit based, more merit based.
Speaker 1: In fact, I heard him say it was just stamp
Speaker 1: of green card and every person in this country who
Speaker 1: went to university or advanced degrees and have him stay
Speaker 1: here and build their career here. That would be my belief.
Speaker 1: I want him to go back to that, not make
Speaker 1: it hard to be or make it easier for real
Speaker 1: merit based it.
Speaker 2: You speak to the President every week, No, okay, I've
Speaker 2: spoken him a couple of times. Jamie Donald, chairman CEO
Speaker 2: JP Morltman, thank you very much and dank I appreciate it.