Don’t care about supply chains, defense tech, or energy independence? Jamie Dimon just gave you 1.5 trillion reasons to start paying attention.
The largest US bank’s focus on investing in four key sectors shows where Dimon is placing his bets: supply chain and advanced manufacturing, defense and aerospace, energy independence and resilience, and frontier and strategic technologies. And as is often the case, where Dimon goes, the rest of the country soon follows.
(By the way: JPMorgan just reported third-quarter earnings, beating estimates with $47.12 billion in revenue — about $700 million above expectations — driven by strong trading and investment banking results. Shares of the bank are up more than 28% this year through Monday, advancing around 1% in premarket trading.)
Dimon has massive sway. His annual letter to JPMorgan shareholders is widely read across the Street and beyond, often touching on topics well outside the bank’s remit. Other times, Dimon and JPMorgan’s actions can quickly ripple across the rest of the industry. Just ask junior bankers vying for PE jobs.
Which is why, as broad as JPMorgan’s initiative is — $1.5 trillion in investments over 10 years — its actual impact on the economy could be even greater.
So what can we expect in the wake of JPMorgan’s news? Here are three places to start:
The US enters catch-up mode: High-priced investments these days feel more proactive. Example: Tech companies need more compute power to be better prepared. However, JPMorgan described the US being in a more defensive posture.
Dimon criticized the US for becoming “too reliant on unreliable sources of critical minerals, products and manufacturing.” He described the “immense challenges” the country faces, adding “we need to act now.” That type of terminology is reminiscent of someone trying to catch up, rather than holding the lead.
New hot areas: The four themes (and 27 sub-areas) JPMorgan targeted could become a feeding frenzy. With a promise to make equity or venture investments of up to $10 billion in select companies, there’s bound to be some jockeying to get JPMorgan’s attention.
Still, those in the space are cheering the move.
“We’re excited to see this level of investment and focus placed on the safety, efficiency, and security of these industries. Digitizing the world’s infrastructure unlocks a lot of real-world value, and AI is improving the resiliency of these operations,” Sanjit Biswas, CEO of Samsara, which focuses on digitizing physical operations, told me.
The government could also play a role. In its announcement, JPMorgan said sometimes it will only consider companies that “have US government support (e.g. contract, co-investment, offtake).” That approach highlights the ongoing convergence of private and public sectors, particularly in cases involving national security.
Help wanted: Big plans come with big talent needs. JPMorgan will look to staff up on bankers with expertise in these areas, and they likely won’t be alone. In the same way companies are increasingly looking for subject-matter experts, so too are the banks hoping to advise them.
