JPMorgan Chase CEO Jamie Dimon sees no slowdown in the AI spending boom. Speaking to CNBC-TV18 at the bank's India conference, he said investment across the hyperscaler ecosystem could reach $1 trillion next year.
That would be another big step up. By Dimon's estimate, spending more than doubled from about $300 billion last year to around $700 billion this year.
A boost to growth, with a catch
Dimon said the spending is adding roughly one percentage point to US GDP each year. "That's like 1% increase to GDP each year," he said.
That growth comes with a cost. Companies are hiring workers, building factories and power plants, and buying equipment and materials. Dimon said that demand "may add a little bit to inflation."
Over the longer term, he thinks AI could push prices down. He called it an "unbelievable technology" and said its rapid expansion looks set to continue.
The timing is sensitive. The Federal Reserve raised rates by 25 basis points last week to a range of 3.75% to 4%, its first hike since 2023.
Dimon said he hoped price pressures would ease, but "there's a chance it won't, and it may even go up a little bit." He added that the Fed should stick to its 2% target.
Where the AI boom meets interest rates
Dimon also pointed to heavy demand for capital from infrastructure, remilitarization and ongoing government deficits. He said that pressure may be pushing interest rates higher.
He isn't the only one making that link. Fed Chair Kevin Warsh said last week that AI companies raising money in the bond market partly explains the rise in yields. The 10-year Treasury yield touched 5% after the Fed's decision.
That's the shift worth watching. The AI trade used to be mostly an equity story. It's now feeding into inflation expectations, bond supply and borrowing costs for everyone else.
Dimon also said there "may be a market correction," but he wasn't sure AI would be the cause.
Too early to call the winners
Dimon was careful not to name winners. He pointed to the dot-com bubble, when many well-known companies failed and lesser-known ones went on to dominate. He said the AI industry could follow a similar path.
On returns, he said AI spending can't always be judged with a simple return calculation. "Sometimes it's just table stakes," he said. Some benefits, like better customer experience, are hard to measure, and he expects companies to get more efficient in how they use AI over time.
For investors, that's an important point. When companies spend to keep up with competitors and not purely for a clear return, it gets harder to judge which ones are building lasting value.
Trade, China and India
Ahead of the summit between President Donald Trump and Chinese President Xi Jinping, Dimon said the two sides appeared to be making progress. He said they should "fully engage" on trade, AI and security, calling the talks important for the whole free world.
On India, he urged Washington and New Delhi to return to the table and finish a trade deal. He said he understood US concerns about India buying Russian oil, but that Washington should consider India's refining needs and avoid "punishing India and the world oil markets."
He said India's economy could triple in size over the next decade, and that JPMorgan plans to keep expanding there.
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