The video features Jamie Dimon discussing significant technological advancements, particularly the role of tech and AI in the global setting. At the Tech Stars conference in London, Dimon emphasizes the positive impact technology has had over the centuries and its crucial role in various fields today. He highlights the global nature of tech innovation, particularly in Europe, and provides a cautious optimism about the potential of artificial intelligence despite widespread fears regarding job displacement.

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Key Vocabularies and Common Phrases:

1. diaspora [daɪˈæspərə] - (noun) - The dispersion or spread of any people from their original homeland. - Synonyms: (dispersion, scatter, spread)

We're here in London because we call it the tech, the tech conference here, but it's also diaspora.

2. semiconductors [ˈsɛmɪkənˌdʌktərz] - (noun) - Materials that have a conductivity between conductors and insulators. They are essential components in modern electronic devices. - Synonyms: (chips, circuits, microprocessors)

semiconductors and gorilla glass caused the iPhone.

3. hedges [hɛʤɪz] - (verb) - To limit or qualify something by conditions or exceptions. In finance, it refers to making investments to reduce the risk of adverse price movements. - Synonyms: (minimizes, secures, safeguards)

You'll have like a real super assistant chief of staff on your shoulder and you wake up, but you're still going to be interviewing people, other jobs, it will handle error rates or it already hedges our trading equity floors.

4. redeploy [ˌridɪˈplɔɪ] - (verb) - To deploy (something, such as resources or personnel) again or differently. - Synonyms: (reallocate, reposition, redistribute)

We love to retrain people, redeploy them, reeducate them, and so I'm not worried about it.

5. elevated [ˈɛləˌveɪtɪd] - (adjective) - Situated or placed higher than the surrounding area. In finance, refers to prices or values that are higher than normal or reasonable. - Synonyms: (raised, increased, heightened)

It's a little odd that public markets are quite elevated and ipos haven't come very much yet.

6. liquidity [lɪˈkwɪdɪti] - (noun) - The availability of liquid assets to a market or company. It refers to the ease with which an asset can be converted into cash without affecting its market price. - Synonyms: (cash flow, fluidity, solvency)

A lot of people, they go to the United States, there's more liquidity, it's easier to do.

7. cyclical [ˈsɪklɪkəl] - (adjective) - Occurring in cycles; regularly repeated. - Synonyms: (revolving, periodic, recurrent)

Is that a structural change or is that something that's cyclical, just having to do with rates?

8. consolidation [kənˌsɒlɪˈdeɪʃən] - (noun) - The action or process of making something stronger or more solid. In business, it refers to the process of combining many things into a single more powerful entity. - Synonyms: (merger, unification, amalgamation)

How much consolidation do you expect in the banking industry? So for the FTC, and I want to be very clear about this, you know, they say to, you know, to hammer, everything's a nail

9. mercantilist [ˈmɜrkəntɪˌlɪst] - (adjective) - Related to mercantilism, an economic policy that is designed to maximize the exports of a nation. - Synonyms: (commercialist, protectionist)

I call it mercantilist behavior.

10. subordinate [səˈbɔːrdɪnɪt] - (verb) - Treat or regard as of lesser importance than something else. - Synonyms: (defer, demote, downgrade)

We have to subordinate some of the stuff we do to national security.

Jamie Dimon on AI, IPOs, US Economy, Fed Rates, 2024 Election

I am here with Jamie Dimon at the Tech Stars conference at the Novo Hotel in London and going to get into a bunch of different things. A lot of the questions that people have, but one main question is we're seeing this sort of explosion in tech. A lot of people are pausing it. How are you sort of seeing the advancements that are most important so far and going forward? What's most exciting? What's the most exciting for you?

So first of all, welcome everybody. Thrilled to be here. First of all, you've got to look at tech in the big picture. It's been changing society for hundreds of years with agriculture and printed and steam engines and electricity and the Internet. And tech grows in itself. You know, the Internet caused a, b and c. semiconductors and gorilla glass caused the iPhone. And so this is just another wave. We're here in London because we call it the tech, the tech conference here, but it's also diaspora. Now if you went back ten years, it was mostly in the United States and concentrated in Silicon Valley, Boston, New York. Now it's everywhere. You know, we have a tech center in Berlin, Glasgow, Edinburgh, which I think is great. You have more innovation taken place. I think it's really important for Europe.

And obviously the thing now is all about AI and AI, which I think is real and is going to change an awful lot of things. I just mentioned one of the things, there's always been a fear of tech that's going to take away jobs, but you got to look at the big picture. Sometimes it does, but in the big picture it is why mankind has gotten better and better lives longer. GDP's go up, productivity goes up, health gets better, work hours go down. So people have to keep in mind the benefits are huge. We probably have to find a better way to help the people get hurt by it.

So you talk about the people who are getting hurt by it. And in a previous interview you were talking about how it's going to reduce some jobs and it's going to create others. Which jobs do you expect to get eliminated and which jobs do you expect to get created? We don't really know yet. I mean, we shouldn't put our head in the sand. We know it's going to be true. So a lot of jobs, your job will be enhanced. You'll get more research, more questions, more. You'll have like a real super assistant chief of staff on your shoulder and you wake up, but you're still going to be interviewing people, other jobs, it will handle error rates or it already hedges our trading equity floors and it's already been used for risk fraud. Marketing hasn't really eliminated a lot of jobs, but it created effectiveness in terms of productivity by reducing fraud losses. And then if it changes jobs and operations and elsewhere, we'll deal with it. We have turnover 20% a year.

We love to retrain people, redeploy them, reeducate them, and so I'm not worried about it. And if it works with the customer and the client, we can kind of do more. That's the other thing for a successful company, if you're growing and expanding, actually almost always getting jobs. So to me, I want to have a successful company and we'll deal with whatever the downside is of AI.

So I was speaking with another head of a major us bank who was saying that he expects his bank to keep growing in terms of business, in terms of assets, but stay the same size when it comes to staff. Do you feel the same for JP Morgan? I don't, I don't really know, to tell you the truth, and I don't like try to predetermine that. So if you look what we're doing, still opening branches, we're still opening branches in cities around the world. We've added, you know, 1000 people in AI itself. You know, we're adding people and data scientists, you know, journey to the cloud. We have 44,000 engineers. So I think what you see is some down, some up. In general, if we're a growing company, I would expect to go up a little bit. In general.

Typically the tech stars is a conference where a lot of founders start to test the waters for ipos, potentially look to go public. There's been a deterrence to really going public as quickly as in the past, particularly for tech companies, just because there's so much private capital out there. Do you still see that? Is that a structural change or is that something that's cyclical, just having to do with rates?

It's a complicated subject. Yes, it's private capital, and I think it's a good thing that people can raise money in the private capital markets, but it's a little odd that public markets are quite elevated and ipos haven't come very much yet. So part of is they have access to capital parts, they're waiting. Part of it is they reduce their own cash burn. They don't need as much cash. So it's a whole bunch of reasons why they're not going public. But I think eventually you do need healthy public markets to have people liquefy their positions, which all the venture capitalists had lunch with a bunch of venture capitalists. They all are going to want to do and actually need to do at one point.

So do you expect that to pick up in the near future, or do you think it's going to remain muted for the foreseeable future? I don't know. I honestly don't know. I think it may very well stay muted because markets may come down as opposed to just go up endlessly and they may find other sources. So when I speak to a lot of private equity and private capital, private venture and stuff like that, they tell you they have more non public sources. I do think it's very important that our policymakers understand, you know, because even here in the United States, we've made it hard to go public. You know, we've eliminated research on smaller companies. We've, you know, we've, the costs are much higher. Those litigation expenses are higher. You know, filing with the SEC is higher.

So I think it would be really incumbent upon us to try to make it easier and cheaper to go public, allow more risk to be born in the public markets, and we got to figure out a way to do that. We actually have a ten takeaways from lunch, which I want to take a good, good look at. So that raises a question of where people are going public. And we're here in London, which has lagged behind a number of other areas, particularly New York, and has lost clout in other areas, too, especially since brexit.

Do you think that this is just a momentary blip, or do you think that just on a broader level, London is kind of losing a bit of its cloud as a major financial center? So I think, first, I love the fact if you listen to the current labor government, they're talking about growth, investment markets, capital markets, and they do need to do those things to help it recover. If they didn't do those things, no, I think it'll become more permanent then a lot of people, they go to the United States, there's more liquidity, it's easier to do, or they have a lot of business there, which also making this a great business environment will also help companies going public here. But right now, Nasdaq, New York stock Exchange, they're just more attractive places to go, and we'll see how that pans out.

I think it's important. We want to help them do better here. I'm not in favor of just advantage in the United States at the expense of Europe. I do think that Europe needs to focus on Mario Draghi's report. There are a lot of things in there that they need to do to get productivity back and growth back and markets back. They need the capital markets union, for example, which they've been talking about for years. They actually do really need a, to foster growth around european countries.

On a broader level, just aside from the London market, what kind of activity do you see in the pipeline for fourth quarter? I mean, do you see reluctance by companies to really engage with major actions because of the election, because of potential volatility, because of geopolitics, or do you see it really ramping up? Yes, I've always, we always talk about backlogs, and I always tell my people, be careful because backlogs tend to grow and expand and stop. There's a pretty good backlog growing of ipos, of companies. You know, whether it happens not is a different thing. And m and a, yes, I do believe I can't prove is more anecdotal. That is tampered quite a bit by, not the election, maybe the election, but by rules and regulations. And we talked to a lot of boards of directors here. You know, they talk about is that is the risk capital there. You can take the risk. They want to be very conservative in the United States more about, you know, can you wait 18 to 24 months to close the deal? And that creates a lot of risk for a company, you know, particularly if you go to banking.

I know a lot of the banks, I think they should be allowed to do deals. They're very, very reluctant because they can't wait. One of the last bank deals took three years. And I think if I remember correct, there's a 90 day regulatory requirement. Well, obviously that's not taking place anymore. And we do have to fix these things. You want an active, healthy m and a market just quickly if policy, and they're not all bad for competition, even though I think it's true in certain cases, but we just become like an anti m and a country, and that's a bad idea.

Okay, just let's say that there's somebody else in charge of the FTC and there are some different kinds of rules and sticks that people have to advance over. How much consolidation do you expect in the banking industry? So for the FTC, and I want to be very clear about this, you know, they say to, you know, to hammer, everything's a nail. They're a little bit like that, but it doesn't mean they aren't right about certain things. They say, I just want to separate that. Look, I think there are 4000 banks in the United States, they're all in a different position. You could be a very profitable community bank. So I don't think the idea you have to merge is true. But if you're competing in certain business for certain clients and certain sites, you may need economies of scale and they should determine. So you do need consolidation. A lot of the mid sized banks want to do it. They shouldn't be hampered.

And they would tell you if I can't do it, basically ceding the ground to JP Morgan. And I think that's unfair. They should be allowed to merge. Their boards of directors should be allowed to make that decision based on what they think is in the best interest of the shareholders. You know, this notion that government should get involved in every single little bank deal, I think you're just wrong. And, you know, they're adding social values to everything they do. It should be about safety and soundness and a board of directors that says we need to merge, we want to merge probably means that heading for a safer and sounder bank, that's their desire. You give a lot of examples where it doesn't work. It doesn't mean it shouldn't be allowed. And I think we've got to be a little more open about letting these things take place and letting them take place quickly.

Aside from just some of the regulatory overhang, there is this question about how much in general the markets going to open up and a lot of that has to hinges on the hinge on the economy. You mentioned earlier that you are more pessimistic about a soft landing. I think you gave it a 35% probability back in April. Do you still think that or do you think that the probability has gone up with some of the good data that we've been getting? I'm not talking about forecasting 2025. And I just think there's a lot of moving parts, a lot of things in the future is inflationary.

These, the most important thing taking place is these wars overseas geopolitics, you know, the terrible, humane suffering, you know, but also the, you know, what's these countries acting in cahoots against western interests, against Israel, against Ukraine, against the United States. And that's really serious. I look at a long amount of serious things. Soft lanes are hard. I hope it happens. I don't know. I just wouldn't count my eggs in that one.

And markets are open. When you say open, they're very. Values are high, they're not low. Both equities and bonds, you know, credit spreads are very low, low. So they're open but people are saying they're not open for ipos. So some ipos, when we just did one of the larger of the year like last week, they're open for those who the market wants to buy today, but don't assume that they're not open. And you know, sometimes people go public, they don't like the price. That's a very different thing. And you should think twice about that when you think you know what a company's worth much more than the market might know that maybe it's an assessment of what you're looking for rather than the actual market being closed.

You said that there are a lot of inflationary things that are coming down the pike. Do you think that it was a mistake for the Fed to cut by 50 basis points? No, actually, I mean, you got to separate the here and now. Inflation is definitely coming down. You know, they don't want to go into recession. Unemployment has been going up. They raised rates. They were late raising rates. They rated very high, rapidly to 5%, I think is the right thing and they're right to take the foot off the gas in that one. I don't think it matters that much, 50 25, honestly. But I think it was ok.

If inflation comes back, I'm looking at future things, the remiliteration, the world's inflationary, the fiscal deficits of the world to states inflationary. The green economy is inflationary. Demographics are inflationary. It's very possible energy prices down the road about two or three years, we inflationary. Those will hit later. They should react at that time to those things, but they don't. They could anticipate that. We don't know that that's going to happen.

I'm so glad you brought the deficit. I watched the treasury auctions. There's another three one today. I watch them every time wondering, are we going to start seeing disruption from some of the concerns that yourself that you bring up. But also every single investor who I speak to says the same thing. Are you surprised that the market hasn't priced in a higher structural deficit in the way of higher yields or at least more volatility, at least at auctions? Yeah. Well, I have a lot of comments that one, commodity markets often don't price things until they actually happen. And so it hasn't happened yet. The, you know, the higher inflation, the higher structural stuff, even though the deficits are there, there's also sentiment, inventory, supply and demand of, you know, of capital goods.

So it's, it's very hard to say that, but that's why? I think that longer rates may actually stay here and tick up a little bit as opposed to go down because of these huge deficits in the United States. And then the markets reacting to. What's the word you used? Volatile or something like that. It's not always bad. I mean I think we overreact sometimes, the volatile markets, but I do think they'll happen again. Dealer inventories are very low, banks are the big market makers are very constrained. Not today.

I mean we have this anomaly where JPMora is going to have a trillion dollars of cash and unable to intermediate in treasury markets or repo markets completely conservatively because we're required to hold that cash in very like central bank reserves, something like that. So I'm Qe fly gets to a certain point, you will see that I may be wrong. And again, if it happens, I don't think it's a disaster. It's not bad for JP Morgan. I do think policymakers will get upset. They don't like seeing that type of thing. And there, I think there are fixes to it. I think they start working those fixes today.

Something that you said about how markets sometimes don't respond until an event is there. Commodity markets. Commodity markets will so think of, think of stock markets are forecasting earnings and cash out five years and ten years and always adjusting it and their buyers and sellers and equity prices adjust. But if you look at commodity price action, what sometimes is forecast in the future, it actually is looking at supply and demand today. So the most important supply and demand today with some sentiment, some inventory, how quickly you can replace supply and demand in. So all commodities are different. But think of the treasury a little bit as a commodity.

Do you think that treasuries, especially if you look at it as commodity, which is a wonderful way to look at it, that there is sort of a catalyst in the election with respect to realizing what the deficit could be. Yeah, look, I. People are making charts about everyone said and what it might mean for the deficit, what they said, what they actually do and actually have a completely different things. I'm not going to worry about that. I think what you should worry about the deficit today is 7% of GDP. When Volcker was around, we had very high inflation was three and a half percent. The debt to GDP, 35% back then, 1982, it's a hundred percent today. The deficits say the biggest peacetime deficits we ever ran. Deficits by their nature are inflationary. And you know, one point, deal with this.

I mean I would beg the government to set up a powerful Simpson balls type of committee authorized by the Congress. Up or down vote. It's probably the only way to do it. The other way to do is wait until some kind of disaster in the market, and then you're kind of forced to do at the wrong time. And I don't know when that might be. Will it happen next year? Probably not. But can America afford 120% debt to GDP? Probably. But should we wait for that hockey stick to start? I don't think so. I think it's just a bad way to run risk.

So you mentioned government. Libby Cantrell of Pimco. She runs public policy over there. Every time she comes on, she tells us that when she talks to clients overseas, she has to tell them, no, Jamie Dimon still isn't running for president. You get that question so much. Does it annoy you or does it flatter you? It's more annoying than not, because I can't run for president, you know, and there was no opening. I mean, there's no way that it was even possible. So it's a little flattering.

But, you know, I want. I just want to help our government do the right stuff. I think there are a lot of things to do to make America far better off, and particularly because I've mentioned this many times, a lot of things we've done which I think are bad, whether you're Democrat or Republican, whether you support it, it's often done in the name of good, have hurt the lower 20%. They're dying younger. Their income didn't go up for 20 years. They're the ones who have more crime in neighborhoods. Their schools don't work. We should acknowledge that as citizens and do something about it. Like I said, a lot of policies put in place have the exact unintended consequence, and that's where they hurt. Like, for example, growing the economy. Well, the people help the most at the lower end.

And I think we have to be very clear headed about how we can accomplish what we want to accomplish to lift up all of America. You have an endorsed candidate, and I wonder why. Is it because you think as the leader of a big company, you've got to work with anyone? Or is this just that you can't decide this particular time around? I will decide. Okay. And I will vote. I reserve the right to do whatever I want. Okay. I'm a citizen. I can vote. I can say what I want and stuff like that. I've never been in the private of endorsing candidates, you know, and so. But I'm thinking through what I want to say or do or something like that.

In a recent Washington Post editorial that you wrote, you talked about how you think it would be important for the next president to have a private sector individual at the cabinet level to really advise. Half. Half? Yeah. Okay. Which positions do you think should be? I mean, look, I look at the government. We need the american public needs and deserves very competent, effective government. And if you go around, they don't believe that's what they have. And, you know, so people have all these things the government should do. But a lot of the things the government does, it doesn't do particularly well. It does some things particularly well. It does a lot of things only the government can do. But we have to be, again, cold blooded, clear headed, pragmatic about what works doesn't work.

And over time, there have been less and less people in government who were in the real world. You may think whatever you want about, you know, I'm not blaming economists or teachers or stuff like lifetime politicians. That's not the same thing. And, you know, there are lessons in the real world. Even FDR, when he's getting closer and closer to World War two and needed to start building tanks and bridges, he took the people he'd been excoring for years, the heads of GM, Ge, Dupont, and got them back. I need you to set up these production boards and grow, do these things.

So it's about growing the economy. It's not about putting business people there. And also, I think we should insult each other as citizens, try to understand each other. And I think it'd be great if the next president, they really want to, what's that word they say? Unify? Put someone from the other party in your cabinet, which, by the way, is what Eisenhower did. And that whole op ed kind of came out of Eisenhower. He got the right people there. They studied the issues. They got the policy right. He never blamed people. He never insulted people. He never, you know, he was always civil, which I think is a better way to be. He didn't denigrate the country, didn't denigrate class of the people.

And so that's, I just think it's a better way to be. And it's a more unifying leadership than, you know, yelling and screaming at each other. If someone, theoretically were called upon as a business leader, would you suggest that they go? It's up to them. I wouldn't suggest they go and echo their life and how they think they can contribute to stuff like that.

So a major focus for you in your recent letter. To investors and just in interviews has been geopolitics and the situation is pretty dire. And I wonder if what you're telling clients, what they're doing, how they're arranging in preparation for potential escalations in a whole bunch of different hotspots. Unfortunately, I go to a lot of things and people like, tell us the positive news. What's the good spin out there? I was getting too bad. I don't do anything like that. The truth is. The truth is the truth, and the truth today is pretty ugly. And we have this war now. Almost a million casualties in Ukraine. The Ukrainians say that 20,000 children have been kidnapped and sent to Russia. It's quite clear that Russia, Iran and North Korea acting in cahoots, that China isn't kind of part of that, but they're aiding in abetting Russia.

You know, China and Russia have spoken about dismantling the world order set up by America and the allies after world War two, which have been quite successful in keeping peace. You know, they want to do it differently and that's their right. I don't think it's a good idea for the western world. And of course the terrorist acts in Israel. Israel is being attacked basically on three or four sides. This is tough stuff. American warships are being attacked every day in the Red Sea. The head of the FBI just said the terrorist threats internally and externally to the United States have never been higher. I think there was a lesson on when Ukraine was invaded. The world isn't a safe place.

We've got to get rid of the illusion that's safe and somehow pieces at hand. So we need a very strong military, which means we have to spend more money at least every now, as I was seen. For that we need a very strong economy. We have to subordinate some of the stuff we do to national security, you know, and we have to engage much better allies in trade, finance, development, finance and things like that if you want to hold the world together. And so, yeah, I think this is the most important thing for it dwarfs when we have a soften landing or modest landing the next twelve months. That to me is a business person. Almost all of us have dealt with that many times.

That is not a big deal, I guess. How do you then advise a potential client about what national security is? You know, is it, is it a car? Is it a. I mean, basically, how do you prepare for the changing world that we live in? Yeah, so this is a very important question. So first of all, in terms of managing risk, when you look at the potential outcomes I mean, all business should look at a range of outcomes and try to be prepared for them whether or not they think it happened, you know, and then, you know, could war affect the global economy? Absolutely. It can cause inflation and no growth. It can cause, it may have no effect, but you got to be prepared for those things.

And then on strategy specifically, we've actually hired a Paul Henley, a former US army national intelligence guy, forming a group, working with our research people, internal people, what to answer exactly those questions. You know, what is national security? You know, Jake Sullivan talks about the small garden with high fences. What's in the garden? What's related to the garden? How would you do that? A lot of companies are still looking at their own supply chains. They would say, no, I get these components from Mexico or Vietnam, but inside that component is a very important one from China. So it's going to take a while. But every country, if it's national security, has the right to say this is we're going to do to protect our national security. And so we need work to do. And then there's the related, I call it mercantilist behavior. People are getting upset at China about EV's and lithium and solar. If it's unfair competition, that's a different issue. But it also needs to be addressed.

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