VTI - AI Is About To Be Everywhere And JPMorgan Chase & Co. Appears To Be Believers

2023-10-02 18:15:14 ET

Summary

• Artificial intelligence will soon be widely used by most people, and those who don't use it risk falling behind.
• AI is just a tool that can help us make better decisions and solve more complex problems.
• JPMorgan Chase & Co. is just one more company that appears to be leading its industry into this data-driven future.
• Investors must keep this fact in mind as they build their investments strategy for the future.

Christopher Mims writes in the Wall Street Journal ,

"AI Is About To Be Everywhere."

Mr. Mims writes,

"Most of us will be using artificial intelligence soon enough. Those who don't? They will be lumped in with the people who clung to the card catalog."

The future?

"Soon, most of us will use tools like these, even if indirectly, unless we want to risk falling behind."

And, this says it all to me.

Artificial Intelligence is just a tool.

It is nothing more than other tools or methods we might use to help us make better decisions or solve more difficult problems.

It seems to say it all to JPMorgan Chase & Co. (JPM).

JPMorgan Chase has said it is spending $15.3 billion on technology investments in 2023.

JPMorgan Chase has said that its technology budget has grown at a 7.0 percent compound annual growth rate over the past four years.

JPMorgan Chase initiated its major thrust in AI in August 2018 when it hired Apoorv Saxena to become its global head of AI and machine learning services. Saxena had previously been employed by Google (GOOG).

"AI is impacting every industry. AI is making a substantial, wide-ranging impact because it is used with data, and every industry is increasingly becoming data-driven. Companies across every industry are looking to gather and use more data. They want to better understand who their customers are, how they interact with them, the services they provide, and how they can improve those services and experiences Every activity is becoming data-driven."

JPMorgan has also migrated to the public cloud.

Why?

Scale!

Scale is the name of the game going forward.

Larry Feinsmith, Managing Director and Head of Technology Strategy Innovation & Partnerships at JPMorgan Chase, states :

"If you look at our size and scale, the only way to deploy at scale is to do it through platforms."

"Data has to be interoperable."

He continues, "Interoperability is the key!"

It should be noted that JPMorgan Chase employs about 43,000 engineers.

Scale and more scale are going to be the foundation of banking and finance in the future.

And the rest of the banking system?

Vivien Lou Chen writes in MarketWatch :

"New York-based JPMorgan has been leading Wall Street's shift toward AI in a number of different ways. From February through April, the bank advertised more than 3,600 jobs globally that are all related to AI...In May, it filed a patent application for its own software, known as IndexGPT, which can be used for analyzing and selecting securities for its clients. And JPMorgan has also created a tool that scans speeches by Federal Reserve officials to detect policy shifts and potential trading signals."

"Rivals of JPMorgan haven't gone quite so far."

In fact, my impression of how the introduction of AI into the commercial banking system is going indicates that no one is near to where JPMorgan is and that in terms of acceleration of effort, JPMorgan is way ahead of the competition

The Future

Christopher Mims has written,

"AI is about to be everywhere."

Investors need to accept this as a "hard fact" and build it into their investment strategies.

And, investors need to pick out who is doing what.

Industry structures are going to change.

They are going to change in major ways.

For example, the talk about scale in the commercial banking industry should scare the hell out of the smaller banks and the banks that are not moving fast enough to be real players in the game.

"AI is about to be everywhere."

The foundation?

Data, data, data...........

The foundation?

Information, information, information......

History shows that information grows and spreads.

Investors, business leaders, politicians, everyone...need to keep this in mind and act on it.

Hanging on to the past, more than ever is not a productive strategy.

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