JPMorgan Chase CEO Jamie Dimon Talks AI Boom, Bond Selloff

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We're really looking forward to this conversation. Again, please, to be bringing you out of tech and of London. It is Bloomberg's Tom Mackenzie. He is at JPMorgan's Techstars Conference in London, as the global banks bringing in a huge amount of capital and ahead of earnings kicking off next week. We bring it to Tom Mackenzie and Jamie Dimon.

Tom Mackenzie (0:32)

Always a great moment, Danny, to speak to Jamie Dimon, of course, the Chairman, CEO, of course, of JPMorgan. This is the 14th year of the JPMorgan Tech Summit here in London, bringing together PE, VC, and of course, your tech investment team. Jamie, thank you for your time. This is an environment, as Danny and the team were saying, in New York where we're seeing the NASDAQ potentially notching a third straight record, tech stocks are powering ahead. We've got the fundraising news coming through from OpenAI, investors still willing to put money to work, and yet we've seen the cost of capital increase. We've seen in some AI names, CDS spreads starting to rise. How much latitude do you see, Jamie, for further funding for this AI?

Jamie Dimon (1:05)

First of all, Tom, thanks for having me here, everyone. Let's start with the good news. This conference used to be 20 people, now 2,000 investors and hundreds of companies from around the world, and it is a very positive sign of tech's ability to expand its diaspora. It's not just Silicon Valley anymore, it's everywhere. So that is a very good sign. And a lot of these companies, they're real. They're going to invent things that will help mankind for hundreds of years. Debt financing is a short-term issue.

But look, rates are going up, a lot of demand for capital, a lot of government financing, in my view, a little bit expected.

If it goes up higher than here, does it create risk? Credit spreads gap out? Yeah, it creates risk for all companies. It changes valuations.

And then your markets open and close, you know. So there's no permanent state of affairs when it comes to markets.

Tom Mackenzie (1:52)

We are seeing that increased competition for capital. So in layering that on top of the forecast around the capex spend for AI, 700 billion this year, potentially a trillion next year, is the view from your team.

What is the potential biggest risk to that forecast? Is it a physical build out? Is it the monetization? Is it the cost of capital? Is it something else?

Jamie Dimon (2:13)

Well, I think you mentioned, it's all of those things, you know? And when we went through this internet, in total, it pays off, but there'll be better models, better semiconductors, there'll be changing schedules, there'll be lawsuits about building these data centers. Look, most of them get built. They'll probably be built where people want them as opposed to where people don't want them. They'll be used. You know, AI itself, I think, creates a lot of value. And so I'm not really worried about it, but you do point out, it is a lot of additional borrowing. So there's normal capex borrowing. I don't know if the borrowing is a trillion, because it's more like the commitments, but there's a lot of borrowing. And then the government's borrowing $2 trillion again.

And this is a global phenomenon. It's not just the United States. And yeah, there's a supply and demand of capital. If you thought there was a savings glut years ago, now there's not. And you know, but it could be a good thing, rates are going up because there's demand for capital and the capital is used productively.

The problem part is the government, it's consumption. That's a whole different thing. So, and then of course government spending can drive inflation. So, there could be a flip side of how this plays out.

Tom Mackenzie (3:16)

I want to get on to that, but you mentioned the politics of AI. What would your advice be to the Frontier Lab founders and to governments in terms of how to resolve the politics of AI and address those tail risks?

Jamie Dimon (3:27)

Well, these are different issues. Data centers, build them where they're wanted. You know, and half of them, half the new ones in America, Texas and Virginia, and people don't want them there. You're not going to win. You get lawsuits. But there are a lot of states who would take it, that have access to power.

And of course, any big company has to be a good community citizen. So I think a lot of these people are doing it. They're going into town. They're being part of the community, they're helping the community get the rights. They make commitments that won't raise consumer electricity costs. It's just things like that. And that'll be worked through. And AI has these huge positive effects. I mean, I do think it'll cure a lot of diseases and it'll save accidents in the roads and it'll composite materials. It'll make life unbelievable for people.