Why Executives Are Embracing AI Spending: Fear of Missing Out

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This is exactly how the CEO reacted when asked about the bank's return on investment regarding their ever-increasing technology budget during JPMorgan's recent earnings call. The financial institution anticipates spending an extra $9.7 billion this year compared to their expenses in 2025.

Many executives are facing scrutiny over their spending on technology and AI. Initial quiet apprehensions about substantial AI investments last year have grown into loud objections projected for 2026.

Dimon's call for trust from shareholders wasn't a plea for blind confidence. He highlighted the risks from fellow competitors and fintech companies, emphasizing that investing in tech and AI holds far greater importance than merely adhering to spending limits.

JPMorgan stands out as a leader in AI sophistication on Wall Street, according to the AI index by Evident.

The specific players may vary, yet many organizations will likely justify their AI expenditures with similar logic: choosing not to invest is allowing competitors to gain an edge, potentially making the difference between market triumph and failure.

While I don't endorse expenditure driven by the fear of missing out, the rationale is understandable. I prefer to battle in the AI landscape rather than avoid competition entirely.

There's another area JPMorgan seems unenthusiastic about engaging in.

The proposal by President Donald Trump to impose a cap on credit card rates could compel JPMorgan to reassess its business model altogether.

It's the newest company to comment on this proposal, and it's significant. JPMorgan's card services revenue reached about $360 billion in the past quarter.

Critics of Trump's proposal argue that capping credit card rates may have adverse effects. If lenders are unable to impose higher rates on riskier borrowers, they might limit credit options instead of reducing rates.

Besides, borrowing habits won't just cease. Given it's the U.S., individuals will seek alternatives, possibly turning to more personal loans, which might make 2026 a noteworthy year for lenders like SoFi.

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