Financial Services Association, April 8 (Editor Niu Zhanlin) On Monday EST, J.P. Morgan CEO Jamie Dimon said in an annual shareholder letter that artificial intelligence (AI) will have a comprehensive impact on business, economy, or society, comparable to several industrial revolutions in the past.

Dimon, one of the most influential business leaders in the world, wrote in his letter: “We are fully convinced that the impact of artificial intelligence will be extraordinary and may be as transformative as some of the major technological inventions of the past few hundred years. Think printers, steam engines, electricity, computers, and the internet.”

According to International Monetary Fund (IMF) analysis, artificial intelligence will replace some jobs and supplement others, thereby affecting nearly 40% of global jobs, while advanced economies will face greater disruption. Industries from medicine to finance to music are already feeling its impact.

Shares of companies linked to the AI boom have soared. Chipmaker Nvidia has risen more than 219% over the past 12 months, and Microsoft's shares have risen nearly 50%.

Dimon pointed out that J.P. Morgan Chase is the bank with the largest market capitalization in the world and is exploring the potential of generative artificial intelligence in its own ecosystem. Software engineering, customer service and operations, and general employee productivity are undergoing artificial intelligence transformation.

According to Dimon, artificial intelligence is probably the biggest problem J.P. Morgan Chase is working to solve. The agency has identified more than 400 applications of artificial intelligence in marketing, fraud, and risk, included thousands of AI experts and data scientists, and began exploring the deployment of generative artificial intelligence.

He believes that over time, the use of artificial intelligence is expected to impact almost all jobs and affect the labor structure. It may reduce certain job categories or roles, but it may also create many jobs that don't currently exist.

Of course, the risks posed by the AI boom cannot be ignored. “You're probably aware that some bad guys are using artificial intelligence to infiltrate company systems, steal capital and intellectual property, or just to cause damage,” Dimon wrote.

Just in January, J.P. Morgan issued a warning that over the past year, the number of daily hacker attempts to infiltrate its systems had increased dramatically, underscoring the escalating cybersecurity challenges facing the bank and other Wall Street companies.

Banking crisis

Three regional banks in the US went out of business last spring, causing financial institutions and regulators to take steps to stop the banking crisis from spreading. Afterwards, J.P. Morgan bought most of the assets of First Republic Bank.

“After two other regional banks, Silicon Valley Bank and Signature Bank, went bankrupt, we bought First Republic Bank in May 2023, when we thought the current banking crisis was over,” Dimon wrote.

He said that only these three banks have a “toxic combination” of extreme interest rate risk exposure, huge unrealized losses, and highly concentrated deposits. But he warned that if interest rates rise or decline, “there will be a lot of pressure not only on the banking system, but also on leveraged companies and other businesses.”

Inflation concerns

Dimon once again warned investors that the US “may be entering one of the most dangerous geopolitical eras since World War II.” Although key economic indicators seem strong and inflation is slowing, he sees many potential risks.

He wrote: “All of the following factors seem to be driving up inflation: continued fiscal spending, the remilitarization of the world, the restructuring of global trade, capital requirements for a green economy, and the possibility of higher energy costs in the future due to a lack of required investments in energy infrastructure.”

Dimon said, “The market seems to think that the probability of a soft landing for the US economy is 70% to 80%. I think the odds are much lower.” Dimon added that people seem to pay too much attention to monthly inflation data and moderate changes in interest rates, and small changes in interest rates today may have less impact on future inflation than many people think.

Dimon has previously publicly stated that he is concerned about America's excessive debt, fiscal stimulus and deficit levels, and the impact of quantitative austerity.

He wrote, “The impact of geopolitical and economic forces is huge and, to some extent, unprecedented. They may not be fully understood until they are fully functional.”