JPMorgan Chase Braces for AI Revolution with IndexGPT and Broader AI Strategy
Credit image: CNBC
Key Takeaways:
JPMorgan Chase is stepping up its AI efforts, applying to trademark an AI-based investment advice service, IndexGPT.
The firm is on track to deliver $1.5 billion of business value through AI by the end of the year.
JPMorgan is leveraging GPT-4 and other open-source models for various use cases.
Despite its AI advancements, the bank has restricted the use of ChatGPT among employees due to compliance concerns related to third-party software.
JPMorgan is not alone in the financial industry in developing large language models, as other firms also invest in this field.
JPMorgan Chase is forging ahead with artificial intelligence (AI), applying to trademark a ChatGPT-like service called IndexGPT, designed to offer AI-driven investment advice to customers, as per CNBC. The initiative aligns with the bank's larger vision to implement AI solutions across its various operations, targeting $1.5 billion of business value through AI by the end of this year.
According to the trademark application, IndexGPT will leverage AI within cloud computing software for analyzing and selecting securities based on customer requirements. However, this product only represents a fraction of the banking giant's grander AI agenda.
Lori Beer, the Global Chief Information Officer of JPMorgan, recently revealed the firm's considerable progress in AI during an Investor Day presentation. She highlighted the firm's increased use of AI and machine learning, with over 300 use cases in production, a surge of 34% YoY, and a significant $220 million in positive revenue impact in the previous year.
The company aims to further escalate its AI application, setting a target of $1.5 billion in value to be delivered through AI by year's end. "I am confident we will hit our new target [...], demonstrating our leadership position in AI," Beer stated. The bank boasts an extensive AI taskforce, including 900 data scientists, 600 machine learning engineers, around 1,000 individuals in data management, and a dedicated 200-person AI research team.
Beer also touched on the role of generative pre-trained transformers (GPT) and large language models (LLMs) in the bank's AI strategy. "We are actively configuring our environment and capabilities to enable them. In fact, we have a number of use cases leveraging GPT-4 and other open-source models under testing and evaluation," she said.
JPMorgan topped the inaugural AI Index of global banks released earlier this year, excelling across talent, innovation, leadership, and transparency. The firm has been investing in AI for years, appointing Manuela Veloso, a Carnegie Mellon professor, in 2018 to amplify its efforts in applying machine learning technology. Its current AI applications include a model to scrutinize statements and speeches from the U.S. Federal Reserve over the past quarter-century.
The bank's planned IndexGPT could potentially be the first consumer-facing ChatGPT-like product from an established financial services firm. However, the financial industry at large is also embracing LLMs, with companies such as Bloomberg developing proprietary GPT products for specific applications.
Despite its AI success, JPMorgan has demonstrated caution, recently restricting the use of ChatGPT among its global employees due to compliance concerns tied to third-party software use. Source