JPMorgan's Pinto cautions about a potential 'correction' in AI valuations

Daniel Pinto, Vice‑Chairman of JPMorgan Chase & Co., has cautioned that the booming artificial‑intelligence sector may be living on borrowed time.

He warned that there is probably a correction to be made, referring to AI-related valuations. Painto added that the correction will also impact the rest of the segment, the S&P, and the rest of the industry.

Pinto stressed that current valuation levels imply a productivity leap that may occur, but is unlikely to happen as quickly as the market is pricing. “In order to justify these valuations, you are considering a level of productivity that … will happen, but it may not happen as fast as the market is pricing now.”

Sources noted that the Vice Chairman’s statement aligned with earlier observations made by other Wall Street leaders regarding the possible formation of a bubble in AI valuations due to major investments in the sector.

Pinto noted that growth potential in the US stock market is currently limited

The top five tech companies are expected to invest around $371 billion this year on data centers needed for training and operating complex models. According to McKinsey & Co., by the end of this decade, maintaining this infrastructure will require $5.2 trillion to meet demand. 

Still, Pinto stressed the importance of establishing a level of productivity that will occur, albeit not as swiftly as the market predicts, to support these valuations.

He also expressed his belief that the US may not encounter a recession in the future, but noted that the country’s stock market growth potential is currently limited.

His findings were made public after the Vice Chairman acknowledged that they had discovered some slowdown. Having served at the largest bank in the US, Pinto predicted that the economy might face sluggish growth next year, while avoiding a recession. 

Meanwhile, reports from sources indicate that JPMorgan has been experiencing rapid growth across Africa. CEO Jamie Dimon visited Nigeria, Kenya, and South Africa in late 2024 to strengthen ties in the region. The bank also opened new offices in Kenya and the Ivory Coast last year to expand its presence in East and West Africa. 

As part of these efforts, Pinto mentioned at the summit that the company is working on upgrading its license in Nigeria. The Wall Street giant already serves 350 clients across the continent, including government borrowers and private sector companies. 

JPMorgan expands its presence in Africa with new offices 

With ongoing trade tensions between the US and China, Pinto noted that Africa stands to benefit as businesses worldwide adjust their supply chains. 

In a statement, he admitted to being pleased with what he observed on the continent. According to him, changing the supply chains was a good idea for Africa. He also pointed out that JPMorgan can increase its reach in the area while gradually and cautiously expanding its presence.

Notably, the company offers a range of services in South Africa, including custody, payments, investment banking, commercial banking, and equity research. 

According to sources, Pinto was the leader of the bank’s Europe, Middle East, and Africa operations from 2011 to 2017. He now plans to retire by the end of June 2026. 

The executive stated that his next move will probably not involve daily management tasks. “At this point, I clearly don’t want any other operating roles,” he said, adding that he joined the board of consumer and health company Johnson & Johnson earlier this year. “I aim to slow down a bit but still want to learn and explore different industries.” 

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