JPMorgan Is Pouring Record Billions Into Tech — All To ‘Rewire’ The Bank For The AI Age

When every other company is trying to be AI-focused, JPMorgan is no outlier and is investing in AI and pioneering its use in the banking sector.

• Consumer and community banking CEO Marianne Lake, during a Goldman Sachs conference on Tuesday, said that the second-largest driver of higher costs is the company’s strategic investments, including AI.
• The bank has developed an LLM Suite to leverage large language models from top AI innovators and currently uses technology from OpenAI and Anthropic.
• JPM expects to invest $18 billion this year in advancing technology.

When JPMorgan Chase & Co.’s consumer and community banking CEO, Marianne Lake, said the bank expects its expenses to rise by $105 billion next year, one driving factor she noted was the bank's investments in AI, a growing part of the business for several firms around the globe and now a focus for the company too.

Lake, during a Goldman Sachs conference on Tuesday, said that the second biggest driving factor of higher costs is the company’s strategic investments, which include building branches, adding bankers, adding advisors, investing in acquisition marketing, refreshing branches, investing in AI, in customer features and technology, and adding new products.

In late September, JPMorgan's chief analytics officer, Derek Waldron, reportedly said the company wants to be a fully AI-connected enterprise. Waldron, in an interview with CNBC, had said that the bank was being “fundamentally rewired” for the AI age.

JPM’s AI Program

The bank has developed an LLM Suite to leverage large language models from top AI innovators and currently uses technology from OpenAI and Anthropic. The LLM suite provides employees with information, solutions, and advice on a wide range of topics.

In June, the bank said that LLM Suite was released in summer 2024 to eligible employees across the firm, providing access to large language models in a secure environment.

The move was driven in part by employee demand, and the platform went from zero to 200,000 onboarded users within eight months, supporting users with idea generation and content drafting. 

In September, Waldron gave CNBC the first demonstration of its AI platform, showing that the program could create an investment banking deck in about 30 seconds. This is a better result than when a team of junior bankers takes hours to complete.

Working On More AI Projects

Lake said that AI is everywhere, and everybody is benefiting. “So we think about sort of AI as an enabler to our business, both in terms of, like, big AI projects that are going to address large groups of people in terms of efficiency and productivity, and then small AI where we're putting tools in the hands of managers of a few hundred people, but asking them to have the same level of productivity,” she said.

She added that at JPM, the work on AI focuses on process automation, such as document management and AI voice. “It's things like AI assistance for employees, whether it's operations employees or in the branch or even me, and it's customer experience investments across the board,” Lake said.

JPM expects to invest $18 billion this year in advancing technology. During the bank's investor day in May, it cited one tailwind the company believes it has while balancing headcount and revenue growth: its investments in technology and AI. The outlook $18 billion in technology spending is an increase of $1 billion year-on-year. 

AI Investment: A Key Factor

Several companies across the globe are leveraging AI to streamline their daily operations and make menial tasks easier. Companies are going all out to invest in AI, with tech giants such as Microsoft and Google now deploying significant capital to this end.

JPM is also trying to make a presence in the AI game and could be the first bank to scale investments in it. Lake said coding assistance and software development are other key areas. “We're asking everyone everywhere to invest in making sure that we're deploying AI, and we've not yet really scratched the surface on what an agentic system will look like. So we're talking, yes, about using large language models and generative AI increasingly to deliver that,” she said.

Wall Street On JPM’s Expense Forecast

TD Cowen analyst Steven Alexopoulos said that the pullback in shares following the expense guidance is a chance to add exposure to a "N-of-1" bank that continues to extend its leadership position.

While the outlook is weighing on the shares, it should buoy organic growth, and consumers remain resilient, with no notable changes in credit quality at either the lower or higher end of the spectrum, Alexopoulos said.

Morgan Stanley lowered the firm's price target on JPMorgan to $331 from $338 and maintained an ‘Equal Weight’ rating, according to TheFly. The firm, whose updated model incorporates the company's 2026 expense guidance, is lowering its 2026 and 2027 earnings per share estimates by 3% and 2% to $21.61 and $23.66, respectively, due to higher expenses.

Analysts on average expect 2026 earnings per share of $21.31 and $22.95 in the following year, according to data compiled by Fiscal AI.

What Is Retail Thinking?

Retail sentiment on JPM jumped to ‘extremely bullish’ from ‘bearish’ territory a day ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.

The retail user message count on Stocktwits for the stock saw a whopping 600% increase in the last 24 hours.

A user on Stocktwits noted that JPM shares were oversold on the expense news but should pick up after the Federal Reserve’s announcement on Wednesday.

Shares of JPM have gained over 28% this year and outperformed the Financial Select Sector SPDR Fund (XLF), which is up 11.4%.  

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