Jamie Dimon says AI spending will pay off—but 'definitely not' on the timeline you expect
AI Summary
JPMorgan Chase CEO Jamie Dimon expressed optimism about the long-term benefits of AI investments, likening them to the internet boom, but cautioned that returns may not align with current expectations or timelines. He advised against purchasing stocks and long-term US Treasurys at current valuations due to rising geopolitical and fiscal risks, despite recent strong market performance. Dimon highlighted the potential for significant disruptions from underlying risks that could impact market stability.
Amid growing debate over whether the AI spending boom will deliver returns, JPMorgan Chase CEO Jamie Dimon struck an optimistic note, saying the investments will likely pay off—but not in the way or on the timeline many expect.
He said, “The amount of money being spent is huge. Will it, in total, pay off? Probably, just like the internet did.”
Pointing at previous trends, he said that during the internet boom, big early players such as Yahoo and Netscape faded while eventual winners such as Google and Facebook emerged later. “Will it pay off the way you expect and the timetable you expect? Definitely not,” Dimon said.
Noting that markets are too complacent about mounting geopolitical and fiscal risks, JPMorgan Chase CEO Jamie Dimon says he would avoid buying both stocks and long-term US Treasurys at current valuations.
“I do think those risks are probably bigger than other people think,” Dimon told CNBC in an hour-long interview, pointing at Ukraine and the Middle East wars, US-China tensions and rising military spending.
Regarding whether markets are underpricing the chances of a major shock, Dimon said that it’s possible that something is baked in, “but what’s not baked in is what actually happens.”
He also suggested that, personally, he wouldn’t purchase long-dated Treasurys
Even if inflation falls back to the Federal Reserve’s 2% target, “the 10-year bond should probably be at 4% to 4.5%,” he said, adding that he sees little upside for Treasury prices.
He was similarly cautious on stocks. While he would consider an individual stock if it were “a great investment,” Dimon said, adding that he won't buy stocks at this valuation.
Despite geopolitical tensions and trade uncertainty, investor confidence has remained strong for the past few months. The S&P 500 has gained nearly 10% this year, driven by steady consumer spending, cooling inflation and optimism around artificial intelligence. In fact, last week, JPMorgan Chase and its peers posted blockbuster quarterly results, driven by surging trading and investment banking revenue.
JPMorgan’s net income for the quarter was $21.2 billion, or $7.70 per share, as almost every business exceeded expectations. Still, Chief Executive Officer Jamie Dimon was cautious about prospects for the future.
“Several risks are shifting below the surface like tectonic plates, including geopolitical tensions and wars, sticky inflation, large global fiscal deficits and elevated asset prices,” Dimon said in the statement. “We cannot predict how these forces will ultimately play out. They may remain manageable, but they could also cause meaningful disruptions when they shift or collide.”
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