As the world rushes to develop and deploy AI technology, JPMorgan’s chief executive issued a stark warning amid a shifting global economic order. 

“We need to remain competitive with China in the artificial intelligence (AI) race by bolstering our technological advancements and reducing our reliance on Taiwan for semiconductor chips,” Jamie Dimon wrote in his annual letter to shareholders for 2025, dated April 7. 

The world is undergoing a shift in power dynamics, with China becoming more assertive on the global stage, Dimon wrote. “This economic competition and conflict will likely go on far longer than the wars on the battlefield.” 

The United States should exercise targeted investment and export restrictions on its competitors for chips used in AI development and hard-to-duplicate military technology, Dimon said, adding that foreign policy should be approached as realpolitik, a system of politics or principles based on practical rather than moral or ideological considerations. 

“Our largest risk is geopolitical risk,” he wrote. The bank is launching the JPMorgan Center of Geopolitics to help clients manage global risk in their investments and businesses. 

Continued tech investments 

Dimon has urged the U.S. to pursue a continued “through-the-cycle” investment strategy in technology to maintain a competitive edge. 

Education on a new tool such as AI is equally as important as the tool itself, Dimon stressed, adding that “the advent of AI and technological change will require lifelong learning and re-skilling.” 

Dimon mentioned that one of his mistakes as CEO was “underestimating the importance of cloud technology.” 

Nearly 70% of all JPMorgan’s applications were on the cloud at the end of 2024, and the $3.4 trillion bank’s migration to Amazon Web Services (AWS) jumped 10 times between 2022 and 2024. 

The bank’s multicloud hybrid approach allows some applications to remain on premises, and the company works with AWS, Microsoft Azure and Google Cloud to avoid “lock-in” of its tech infrastructure, Dimon noted last year. 

Proposed regulatory changes 

Regulators overreacted to the 2008 financial crisis, Dimon wrote in his letter, adding that “shortsighted and misguided policies often sound good politically but usually have unintended consequences that frequently hurt the very people those policies are trying to help.” 

The banking industry needs dynamic regulations, and the Dodd-Frank Act is one regulation in need of tweaking, Dimon stated in the shareholder letter. 

“Dodd-Frank set up a balkanized and dysfunctional regulatory system with too many cooks in the kitchen,” Dimon wrote. “This is hard for the regulators as well as the banks. Not only does it result in excessive and duplicative regulations, but it also makes it more difficult for regulators to be responsive and nimble in a rapidly changing environment.” 

Capital requirements for banks have been increasing since the 2008 crisis, which has led to hyper growth of private markets for lending, Dimon wrote. 

“Financial risks have grown dramatically outside of the banking system, where there may not be the same liquidity or transparency,” he stated. 

Whereas banks used to lend nearly 100% of their deposits, they now lend approximately 70%, Dimon argued. Before the 2008 financial crisis, fewer than 15% of bank assets were liquid and now that figure is more than 30%. 

If capital requirements are relaxed, banks could provide additional liquidity to financial markets, Dimon said. 

The Comprehensive Capital and Analysis Review, a stress test conducted by the Federal Reserve annually, also needs tweaking, Dimon said.  

“While it essentially repeats the conditions during the great financial crisis, it does not take into account any of the structural improvements to regulations, underwriting and product offerings since then,” Dimon wrote. “The reported results of the test do not come close to anything that would actually happen if the hypothetical scenarios were to happen.”