Jamie Dimon, chief executive of the US bank “JPMorgan Chase & Co.”, believes the wave of investment by major technology companies in artificial intelligence will continue. In an interview with CNBC-TV18 he emphasised that while this investment adds to economic growth, it also carries the risk of raising inflation.

By Dimon's estimate, investment by the large technology companies that run vast computing capacity and data-centre infrastructure stands at around $700 billion this year and could reach $1 trillion next year. He described spending on this scale as additional investment equivalent to roughly 1 percent of US GDP each year.

Dimon called artificial intelligence an “incredible technology”, but said it is difficult to determine at this point which company will reap the greatest long-term benefit. He cited the internet boom of the late 1990s as an example, recalling that although major technological change does create real value, not every company that invests in it succeeds.

The inflation risk has not gone away

Growth in artificial intelligence investment may have a positive effect on economic activity and productivity, but Dimon believes it could also push inflation up to some degree.

If inflation stays high for an extended period, it could affect expectations for interest-rate cuts and increase volatility in the valuations of technology companies and in the prices of other risk assets. Dimon also noted that although AI investment is set to keep growing, there is a risk of a market correction.

A call for broad US–China talks

Dimon also expressed the view that the United States and China need full-scale talks on trade, artificial intelligence and security. In his words, the relationship between the two countries matters not only for the United States but for other democratic economies as well.

He further noted that US–India trade talks are not progressing sufficiently, and urged that the matter not be postponed for long. Punitive measures that would adversely affect India and the global oil market should be avoided, Dimon said.

He also highlighted that “JPMorgan Chase” plans to continue expanding its operations in the Indian market.

Source: cnbc mongolia news site