This year, Dimon had a lot to unpack—from high interest rates to a robust job market and a banking crisis. He also had a few choice words about A.I. developments, the climate crisis, and the war in Ukraine. Dimon’s address to shareholders goes through the entire gamut of lessons from the past as well as opportunities and threats that lie ahead. 

Here are some key takeaways from the CEO:

1. A banking crisis was ‘hiding in plain sight’—and the Fed is to blame

Silicon Valley Bank collapsed last month, followed quickly by Signature Bank. Silvergate, a bank that was used primarily by crypto-linked companies, collapsed just a few days earlier. The government stepped in to protect all depositors of SVB, even those beyond the usual FDIC insurance limit of $250,000.

Dimon wrote that the risks within the banking system were “hiding in plain sight” because of high interest rates and their impact on “held-to-maturity” portfolios. In SVB’s case, that meant longer-term bonds that had lost value over the past year. The CEO also mentioned that regulators “incentivized” to own those types of products because they were considered safe by regulators, and stress testing never “incorporated rates at higher levels.” He added, though, that the unexpected risk was a handful of venture capital funds that worked in “lockstep” and had a sway on SVB’s nearly 35,000 clients, which prompted a $42 billion bank run.

“This is not to absolve bank management—it’s just to make clear that this wasn’t the finest hour for many players,” Dimon wrote in the letter. “All of these colliding factors became critically important when the marketplace, rating agencies and depositors focused on them.”

Dimon foresees the ongoing banking troubles to last for a few years but maintains it isn’t anything like the 2008 global financial crisis. 

“As I write this letter, the current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come,” Dimon wrote.

2. Thoughts on artificial intelligence

Dimon is bullish about A.I. after the world was taken by storm with the introduction of OpenAI’s chatbot, ChatGPT. The CEO said he has spent “hundreds of millions of dollars” on improving A.I. programs at the bank.

At JPMorgan alone, the CEO says there were hundreds of ways to use A.I., from marketing to fraud prevention. He said that individual teams of data scientists, managers, and researchers are also working on aspects of A.I. development within the bank, and more than $2 billion has been spent on new cloud data centers. 

“Artificial intelligence (AI) is an extraordinary and groundbreaking technology,” Dimon wrote. “AI and the raw material that feeds it, data, will be critical to our company’s future success—the importance of implementing new technologies simply cannot be overstated.”

3. The U.S. needs to fast track clean energy

Dimon acknowledged the urgency to act on climate change-related goals, and suggested a “massive global investment” in clean energy to achieve this. 

“To expedite progress, governments, businesses and non-governmental organizations need to align across a series of practical policy changes that comprehensively address fundamental issues that are holding us back,” Dimon wrote. 

As steady energy and food supply remains under threat with the ongoing war in Ukraine, Dimon says policies like the CHIPS Act signed last August should be implemented “effectively” to make a real difference in boosting clean technology in the U.S.

“Polarization, paralysis and basic lack of analysis cannot keep us from addressing one of the most complex challenges of our time,” Dimon wrote. 

4. Dimon is looking at Apple and Walmart as competition

Aside from other major banks, Dimon says he sees Walmart and Apple as competitors. 

Walmart uses digital technology tools to provide banking services to its customers, while the iPhone maker is already a big player in the banking and payments space though Apple Card and Apple Pay. These companies are big enough that they could dwarf the role of the banks in the financial system. 

“Large tech companies, already 100% digital, have hundreds of millions of customers, as well as enormous resources, in data and proprietary systems—all of which give them an extraordinary competitive advantage,” Dimon wrote.

5. There are ‘storm clouds ahead’ because consumer savings are dwindling

The U.S. economy has been grappling with stubborn inflation, which hit a 40-year high last June. The Fed has increased interest rates in response to cool down prices, which have been on a downward trajectory for seven months.

Dimon says that while 2022’s “storm cloud” challenges have been tamed, they are not completely out of sight, including high inflation, soaring interest rates, and the Ukraine war. 

“There has been a lot of market volatility over the past year, partially, in my opinion, as people over-extrapolate monthly data, which is highly distorted by inflation, supply chain adjustments, consumer substitution, basically poor assumptions about housing costs and other factors,” wrote Dimon.

This year, he says, there are new challenges in the form of shrinking consumer savings. Dimon noted that consumers are shelling out 23% more now compared to pre-pandemic times, making them spend a larger portion of their income on daily life. But he says there is a silver lining. 

“We’ve had 10 years of home and stock price appreciation, and even if we go into a recession, consumers would enter it in far better shape than during the great financial crisis,” Dimon said.

6. Dimon is worried about the U.S. skills gap and says lower-paid workers need to get more pay

Even though unemployment is still very low, Dimon thinks the labor in the U.S. has been impacted by a skills gap, and says he’s concerned that it’s making it harder for some people to land jobs. The CEO added that the gap between skilled and unskilled people will create further income inequalities.

“The gap between skilled and unskilled workers has been growing dramatically—so much so that unskilled labor has become less and less a ‘living wage,’” he wrote. 

He thinks it’s of top priority to have more people educated and skilled for the real world, adding that living wages “bring dignity” and pave the way for future opportunities in housing, health, and well-being at large. Dimon suggests expanding existing tax credit programs to support those in need or who earn low wages.