Nearly Twenty Billion of TechnologyNarrow moat

The technology budget is the clearest expression of what scale buys, and of what it costs.

JPMorgan expects technology spending of approximately $19.8 billion in 2026, roughly 10% higher than the prior year, driven by business growth, product demand, inflation, higher hardware costs amid AI-related chip and memory shortages, and rising infrastructure and software costs¹.

That last clause is worth pausing on: the bank's cost base is now exposed to the price of memory, which is a sentence that would not have appeared in a bank's guidance five years ago and which connects this company to several others in this collection.

The competitive point is proportional. Nearly $20 billion is larger than the entire revenue of most banks on earth, and it is roughly a fifth of JPMorgan's expense base — an amount a regional competitor cannot approach in absolute terms and cannot afford in relative ones. Fraud detection, payments infrastructure, market connectivity and regulatory reporting all reward scale directly.

The honest qualification is that a large share of any incumbent bank's technology budget maintains what already exists rather than building anything new, and a firm founded recently carries none of that burden.

The measure is whether the spending shows up in the overhead ratio. Twenty billion that holds the ratio at 52% is an investment; twenty billion alongside a rising ratio is maintenance.