JPMorgan: The AI capex boom shows no signs of slowing, may reach $1 trillion by 2027, and could slightly exacerbate inflation.

JPMorgan CEO Jamie Dimon believes the AI capex boom shows almost no signs of slowing, and total investment across the hyperscaler ecosystem could reach $1 trillion next year. Dimon said total spending in the hyperscaler ecosystem has surged from about $300 billion last year to roughly $700 billion this year, more than doubling, and this growth momentum is driving economic growthequivalent to about 1% of annual GDP growthand as companies hire workers, build factories and power plants, and purchase equipment and materials, this spending could slightly exacerbate inflation. Dimon said, "AI is incredible technology, and its rapid expansion looks set to continue, but in the long run, AI could have a deflationary effect." Dimon said it is still too early to pick winners from the AI boom, citing the dot-com bubble as an example, when many well-known companies collapsed while little-known companies emerged as big winnersa trajectory that could play out in the AI industry. Asked about the returns on AI capex, Dimon said investments cannot always be measured purely by rate of return, and sometimes they may simply be basic inputs. He listed improving customer experience as one of the benefits that is difficult to quantify, and said companies' efficiency in deploying AI may improve over time. Beyond AI, Dimon said massive market demand for capital amid infrastructure construction, remilitarization, and persistent government deficits may be pushing up interest rates, and a market correction could occur, though it is uncertain whether AI would be the cause. On inflation, Dimon said he hopes price pressures can ease, but they may not cool and could even rise slightly, though the Federal Reserve should stick to its 2% inflation target.