MUMBAI — Jamie Dimon, chairman and chief executive of JPMorgan Chase, the world's largest investment bank, said spending across the hyperscaler ecosystem — operators of large-scale data centers — could reach $1 trillion next year. He said such large-scale investment would drive economic growth while at the same time fueling inflation.
Dimon made the forecast in an interview with CNBC at JPMorgan's India conference in Mumbai on the 22nd. Spending across the hyperscaler ecosystem has more than doubled to about $700 billion this year from roughly $300 billion last year.
"It's estimated to add about 1% to GDP each year as companies hire people, build factories and power plants, and buy equipment and materials," Dimon said, adding that it "could be a little inflationary." Over the longer term, however, he said AI could have a deflationary effect.
On the growth potential of AI technology, Dimon called it "an unbelievable technology" and said the "rapid expansion will continue for some time." Still, he said it was too early to declare winners in the AI boom, pointing to the dot-com era, when early standouts such as Yahoo and Netscape faded while later entrants like Google emerged as winners.
Asked about the return on investment from corporate AI spending, he said investment does not always come down to a calculation of returns, describing it as "sometimes just the basic cost of entry." The remark was read as meaning that AI adoption and investment may not pay off immediately, but that companies cannot afford to delay. He cited improved customer experience as a benefit of AI adoption that is hard to quantify, and said he expected companies to adopt and use AI far more efficiently over time.
Vast Funding Demand Is Pushing Rates Higher, With Prices Possibly Rising Further
Beyond AI, Dimon said vast demand for funding — driven by infrastructure construction, rearmament tied to wars and persistent government budget deficits — may be pushing interest rates higher. He remained cautious on inflation, saying he hoped price pressures would ease but that "it's possible they won't, and they could even go up a little," and stressed that the Federal Reserve should stick to its 2% inflation target.
On the summit between U.S. President Donald Trump and Chinese President Xi Jinping scheduled for the 24th, he said "it looks like both sides are making progress," and advised that both sides need "full engagement" on issues including trade, AI and security.
Dimon has been issuing warnings about the global economy more frequently of late. In an interview in July, he said markets were not sufficiently pricing in mounting geopolitical and fiscal threats. Citing the war in Ukraine, conflict in the Middle East, U.S.-China tensions and rising military spending amid budget deficits, he said, "I see these risks as bigger than other people do."
He also said of long-dated U.S. Treasurys that he "personally would not buy them," and projected that the 10-year Treasury yield would "stay in the 4.0% to 4.5% range" even if inflation falls to the Fed's 2% target. He was cautious on equities as well, saying he would consider individual stocks if they were good investments but would not buy the index at current valuations.
