AI is real, and it will pay off, just as the Internet did, says JPMorganChase CEO Jamie Dimon

Jamie Dimon, who's led the world's biggest bank by market cap for over two decades, has lost none of his enthusiasm for India as an investment destination, although he'd like to see some things change. In an interview with Sangita Mehta and Sruthijith KK, the chairman and CEO of JPMorganChase also said that the Indian central bank knows what it's doing with its plan to raise dollars and shore up the rupee. And, Dimon has a clear view on the Tata Sons leadership issue as well. Edited excerpts:

How do you view the growth in the Indian economy?

At 7.8%, India is probably the fastest-growing economy on the planet. I think it's got great prospects. It's done a lot of things over the years that have made the economy better. There are always things you can do to make it better, particularly around regulations, consistent taxing and consistent policies. My view is it's going to have a pretty bright future.


Has the foreign investor enthusiasm for India cooled due to the AI rush or domestic structural issues?

I do think the world is very complex, and people are making different geopolitical decisions that may be somewhat AI-related. I think that's probably true. It may be trade-related, where people are just a little less certain. You often get complaints from investors on taxes and inconsistency in the application of rules. Those should be fixed to strengthen investments here.

Also Read | Decoding GDP growth: The good, the bad & the data

How do you view India raising $132 billion in foreign-currency deposits to help support the rupee?

The RBI is pretty good at figuring out what it wants to do. If it thinks it needs to raise dollars that way, I would assume it is trying to do the right thing for the country. All governments do things like that.

Historically, when US Treasury yields rise, the dollar strengthens, but that relationship has weakened. What is your outlook on the dollar, and how do you view gold?

Currencies relate to multiple things. Embedded in the currency today are people's future expectations of inflation and whose economy is stronger. We've had a strong economy. Generally, if you have a strong economy and low inflation, that's better for your currency, which is why Treasury secretaries always say, "We want a strong dollar," because that means you have a strong economy with good growth relative to others.

Now, we have a few issues. We have a little more inflation, our sovereign debt is too high, and we're raising $2 trillion a year. That may be affecting the 10-year bond. I don't know about the future of gold and the dollar, but I think America is still a strong investment destination.

The US Federal Reserve has raised rates, and the President seems comfortable with the decision...

The President can't tell people how to vote and I think Kevin Warsh will act independently. My guess is that he convinced the President it was the right thing to do because, in the long run, tackling inflation is better for growth, the dollar and the 10-year bond. If inflation rises, they will be forced to raise rates.

Also Read | India’s growth engine still has plenty of runway with earnings set to accelerate: Jefferies

Is the surge in AI investment creating a bubble?

First, AI is real. JPMorganChase has been investing in it for 14 years. We have hundreds of use cases across risk, fraud, marketing, document reading and customer generation. But with what companies are paying now, you're comparing apples to oranges. The huge capital investment has not yet been deployed to companies.

Even what companies are doing today uses only a small part of that investment. We'll see how it sorts out. Companies aren't going to pay if they're not getting value. They see a lot of value in reducing error rates, and AI improves coding capability considerably.

The question is whether, after investing $3 trillion, there will be enough revenue to pay for it. I don't know. AI will pay off, just as the internet did. But the internet paid off in different ways and at a different pace than people expected. Ultimately, it was worth it.

Between the problems in private credit and a potential AI investment bubble, which would make you lose more sleep?

I'm not sure either is systemic. I don't think private credit is systemic, but in a downturn, it will perform worse than people think.

That won't apply to everyone. Some people will do quite well, while others may not.

That has been true in every credit cycle I've seen, and some types of credit will have a harder time. We've had a benign credit cycle for the better part of 15 years. The next one may not be so benign.

Are you concerned that employees may rely too heavily on LLMs and apply their minds less as AI spreads across organisations?

Maybe, but I'm not going to worry about it. We need to judge employees by how well they perform and how much value they add. Artificial intelligence can be a tool that helps them do a better job.

A JPMorgan Chase analyst team recently said it no longer has a base case for oil. Do you share that view, particularly after the events of the past three or four days in the Middle East?

I think people, including me, were surprised by the world's resilience to an oil shortage. But as it turns out, of those 20 million barrels a day, five million were shipped from Saudi Arabia to the West. The Chinese cut their consumption by five or seven, partly by using their own reserves. Others shipped oil elsewhere. So, oil remains in full supply.

The problem is now refined products, where stockpiles are much lower. If this continues, the effects in the first 12 months could be different from those in the second 12 months. It is still concerning.

How successful have you been in bringing people back to the office?

One hundred per cent. There was no bringing them back. It was: "You are back in the office, effective this day." Timetables differ slightly across parts of the country, and in some places, because of certain constraints, people still work from home.

I've never said there's anything wrong with working from home but it. must be good for the client and the company. We've always had 10% of our people working from home, and we make exceptions for about 2,000 caregivers, some permanent and some not. Everyone else is in the office.

Coming back to India, what can be done to attract more foreign investment?

Most investors probably have very positive views on long-term investment in India, but they worry about the inconsistent application of taxes. I get a lot of complaints from companies about paying more tax on a deal than they expected.

Foreign companies often have a hard time competing here because they're not allowed to. As a result, India attracts less foreign direct investment. Competition is good for India. Sometimes local companies use regulations to block competition, and the governments shouldn't allow that. I think it's bad for all Indian citizens.

There is also a wide variety of things India can do to develop its capital markets.

Have investors become less interested in emerging markets as an asset class over the past seven or eight years?

Emerging markets are going to grow faster than most other regions. It's always a little more complicated because of laws, taxes, regulations, growth and trade, but Asia will be the fastest-growing market in the world.

JPMorganChase has grown considerably in Asia and we will continue to do so. We look at every country's rules, regulations, central bank, its schools, its commodities for example. We try to understand its strengths and weaknesses, and each country has its own growth prospects.

Some countries, such as South Korea and Ireland, have done a great job fixing what was broken. Others have done a pretty good job of destroying what could have been good. I have high hopes that Argentina may turn things around. Many socialist countries have done a pretty terrible job.

You met Tata chairman N Chandrasekaran earlier today. How do you view the conflict at the Tata Group?

I think the world of Chandra. He has done an exceptional job. I knew Ratan Tata before him. He ran the company, built it and created huge value, including for its people and foundations. My view is that public transparency is a good thing. If I were the government, I would be concerned that this kind of conflict could deter foreign investment. You want consistency, transparency, regulations, rules and proper governance at the board level. It's complex, and I don't know all the details, but I think Chandra is exceptional. I would never want to lose him. If I were either the trust or the board, I wouldn't want to lose him.