Jamie Dimon says artificial intelligence could have the same impact on humanity as the printing press, electricity and computers

Jamie Dimon, experienced CEO and president of the company JPMorgan Chasestated that he believes that artificial intelligence will have a profound impact on society.

In his annual letter to shareholders published Monday, Dimon selected artificial intelligence as the first topic in his update on the issues facing the largest U.S. bank by assets – geopolitical risks, recent acquisitions and regulatory issues.

“While we don’t know the full effect or the exact rate at which AI will change our business – or how it will impact society as a whole – we are absolutely confident that the consequences will be extraordinary,” Dimon said.

The impact will be “likely to be as transformative as some of the most important technological inventions of the last few hundred years: think the printing press, the steam engine, electricity, computing and the Internet.”

Dimon’s letter, widely read in the business world due to his status as one of the world’s most successful finance leaders, touched on a variety of topics. The CEO said he had ongoing concerns about inflation pressures and warned again that the world may be entering the riskiest era in geopolitics since World War II.

But his focus on artificial intelligence, first mentioned in Dimon’s 2017 annual letter, stood out. The technology, which has gained prominence since ChatGPT became a viral sensation in late 2022, can generate responses to human-sounding queries. Enthusiasm for artificial intelligence has fueled the rapid growth of chipmakers Nvidia and helped take tech company names to new heights.

JPMorgan currently has more than 2,000 artificial intelligence and machine learning employees and data scientists working on 400 applications, including fraud detection, marketing and risk control, Dimon said. The bank is also exploring the use of generative artificial intelligence in software engineering, customer service and ways to increase employee productivity, he said.

The technology could eventually cover all of the bank’s approximately 310,000 employees, helping some employees, replacing others and forcing the company to retrain employees for new positions.

“We anticipate that over time, the use of artificial intelligence can improve virtually every job and also impact the composition of our workforce,” Dimon said. “It may restrict certain job categories or roles, but it may also create others.”

Here are excerpts from Dimon’s letter:

“Many key economic indicators are currently still strong and likely to be improving, including inflation. However, as we look ahead, it is important to consider the conditions that will impact the future… The following factors all appear to be inflationary in nature: current budget spending, world remilitarization, world trade restructuring, capital needs of the new green economy, and possible higher energy costs in the future (even though there is currently an oversupply of gas and large spare oil production capacity) due to the lack of needed investments in energy infrastructure.”

“By most measures, equity values ​​are at the high end of the valuation range and credit spreads are extremely tight. These markets appear to be pricing in the risk of a soft landing from 70% to 80% – moderate growth as inflation and interest rates fall. I think the chances are much lower.”

“If long market interest rates rise by more than 6% and that rise is accompanied by a recession, there will be a lot of stress – not only on the banking system, but also on leveraged and other companies. Remember, a simple 2 percentage point rate increase essentially reduced the value of most financial assets by 20%, and some real estate assets, particularly office assets, may be worth even less due to the effects of the recession and higher vacancy rates. “It’s also important to remember that credit spreads tend to widen, sometimes dramatically, in a recession.”

“There is little actual cooperation between practitioners – banks – and regulators, who are generally not business practitioners… Unfortunately, without cooperation and sufficient analysis, it is difficult to be sure that regulations will produce the desired results without undesirable consequences. Instead, by continually improving the system, we can make it worse.”

“Russia’s invasion of Ukraine and subsequent heinous attack on Israel and ongoing violence in the Middle East should have challenged many assumptions about the direction of future security and security, bringing us to this pivotal moment in history. America and the Western free world can no longer maintain a false sense of security based on the illusion that dictatorships and oppressive nations will not use their economic and military power to achieve their goals – especially against what they perceive as weak, incompetent and disorganized Western democracies. “We are reminded that national security is and always will be of paramount importance, even if in peaceful times its importance appears to be diminishing.”

“One common sense and modest step would be for social media companies to further strengthen platform users’ control over what they see and how it is presented by leveraging existing tools and features — such as the alternative data feed algorithm settings that some offer Currently. I believe many users (not just parents) would appreciate being able to more carefully curate their channels, such as prioritizing educational content for their children.

“There is a lot of complexity involved in taking over a large company. People tend to focus on financial and economic performance, which makes sense. For the First Republic, the numbers look pretty good. We recorded an accounting gain of $3 billion on the purchase and told the world that we expected to increase profits annually by over $500 million, which we now believe will be closer to $2 billion.”