Artificial intelligence is taking over.
This is something that I write a variation on almost weekly. It does get redundant. However, the progress that is being made is truly astounding.
I know many are out there calling for the "popping of the AI bubble". Others are talking about how the hype simply did not deliver. All of this, to me, fits into the nonsensical category.
Certainly, markets tend to get ahead of technology. Could "ai stocks" be overpriced? Without a doubt. At the same time, is the hype machine ever reality? The real world use cases tend to lag the narrative. The latter is simple to construct whereas the former requires actual development and building.
That said, there are signs that major corporations are entering the ring in a major way.
JP Morgan Seeks To Be First AI Megabank
JPMorgan rolls out LLM Suite.
The program, called LLM Suite, is a portal created by the bank to harness large language models from the world’s leading AI startups. It currently uses models from OpenAI and Anthropic.
In a demonstration the CTO showed how the system was prompted to develop an investment banking pitchbook on Nvidia. It produced the result in 30 seconds, something that would take a fleet of junior bankers all night to accomplish.
Waldron, who gave CNBC the first demonstration of its AI platform seen by any outsider, showed the program creating an investment banking deck in about 30 seconds, work that would’ve previously taken a team of junior bankers hours to complete.
This is significant due to the fact that we are seeing entry by the financial industry. FinTech long was a mainstay, battling the banks. Of course, the latter did not sit back and get crushed. The large institutions adopted technology, streaming processes and generating more efficiency.
Since the release of GPT3 back at the end of 2022, the technology world has speculated on the potential of these LLMs.
The technology world was quick to create tools and use them for in-house processes. Big Tech such as Salesforce, Meta, and X all enlisted the aid of this technology.
It appears the banks are now joining the party.
First Mover
One question is what this will do for the market with JPMorgan already stepping into it? We can surmise that the likes of Goldman Sachs are focusing in the same direction.
The future is one of automation. Having pitchbooks generated in seconds is an obvious boost to efficiency. It does not, however, really add to the enterprise.
We have to be careful about judging the technology on version 1.0 (or 2.0). This is still the early stages. I am more interested in what is built on top in a year or two.
For example, could we have a future where not only does LLM Suite generate a pitchbook for Nvidia but it is also able to make a presentation? At the same time, if Nvidia is looking for investment banking services, could it develop an agent that acquires all the information (pitches) and offers up suggestions, if not outright deciding?
This is how automation works.
JPMorgan, like all other institutions, have to think about an era where they do not cater to humans. Instead, it is machines they have to target. An agentic world means humans are removed from the process, similar to what took place with computation.
In the digital world, network effects generated by platform advancement is what wins. Will this apply to JPMorgan? Are we seeing a digital platform emerging in the idea of an AI megabank?
We know what Google, Meta, and Amazon did. The dominance in their fields is decades old and there is no sign of it deteriorating.
Could finance follow suite? If we see it become digitized, then logic could make the case. However, there are a lot of challengers, including the likes of crypto and DeFi.