JPMorgan has been able to reduce headcount by up to 40% in some departments at the bank thanks to AI, CEO Jamie Dimon said on Tuesday.
But investors who expected the technology to slash banks’ profit margins are likely to be disappointed.
Analysts asked Mr. Dimon about advances in AI during JPMorgan’s second-quarter earnings call on Tuesday, when five major banks reported strong profit growth. Dimon reiterated that the technology won’t suddenly shrink the company’s operating budget.
Asked when AI would slow bank expense growth, he said: “We don’t see any particular benefit from AI.”
“In a competitive capitalist world, we’re all going to leverage AI to do a better job for our customers. We can’t just say, ‘Oh, our margins are going to go up. We’re going to maintain that,'” he said. “If that were true, our profit margins would be 80% today, thanks to computerization over the past 20 years.”
When asked by another analyst whether AI will create a leaner JPMorgan in the future, Dimon said: The technology is expected to significantly improve efficiency and reduce headcount.
“In individual areas, we have cut jobs by 30% or 40%,” he said. “Most of those people have been offered jobs elsewhere, so we’re counting on that.”
Mr. Dimon said in May that the bank would likely hire fewer bankers in certain areas and hire more “AI talent” in the future.
Dimon said JPMorgan has a technology budget of nearly $20 billion and already has nearly 1,000 use cases, including fraud prevention, marketing and note-taking. But he reiterated that because most other banks are making similar investments, the main benefit will flow to customers rather than differentiating JPMorgan from its competitors.
JPMorgan Chief Financial Officer Jeremy Burnham mentioned tokens, an AI-related expense that could mount in the coming months. He said token costs are “negligible” at the moment and will remain so until the end of 2026, although the bank still “expects some meaningful acceleration in that number in the second half of this year.” He said the issue of token spending remains a key issue for JPMorgan and that it will continue to look at “using the right model for the right purpose.” Business Insider previously reported that the company can track individual engineers’ AI usage.
JPMorgan reported net income of $21.2 billion, up 41% from a year ago, boosted significantly by investment gains in Visa. As Dimon noted in a press release, each business posted record revenues this quarter, and investment banking fees rose 30% year-over-year to $3.3 billion, the highest level since 2021.