Wall Street banks finance and adopt AI as risks mount on both fronts
XLF•Major U.S. banks see AI infrastructure financing as an opportunity but warn of uncertain demand, project returns and security risks. Citigroup said AI tools have cut some product development time by up to 40% and technology vendor expenses by 30%.
1. Financing AI infrastructure
Executives at major U.S. banks discussed uncertainty over demand for computing power, returns on data center projects and the risks of financing the AI buildout. Wells Fargo CEO Charlie Scharf said the investment cycle brings opportunities and risks, including significant leverage and upward pressure on some prices and supply chains. Goldman Sachs CEO David Solomon said the evolution of capital and computing needs remains uncertain.
2. Banks deploy AI
Banks are also using AI to reduce costs and improve productivity, though JPMorgan CFO Jeremy Barnum said benefits are not yet visible in the bank’s quarterly earnings. Citigroup CEO Jane Fraser said AI has enabled products to be developed at lower cost and up to 40% faster, while coding tools reduced technology vendor expenses by 30%. Executives also highlighted security challenges as AI agents gain the ability to act autonomously.
