JPMorgan pledges $10 billion to US companies 'essential to national security'

JPMorgan Chase (JPM) said on Monday it plans to invest as much as $10 billion in direct equity and venture capital stakes in companies operating within key industries such as artificial intelligence, mineral producers, and defense.

The strategy is part of a wider “security and resiliency” plan by the country’s largest bank to commit $1.5 trillion in future financing and spending on industries critical to national and economic security in the US and allied nations, according to a press release.

JPMorgan CEO Jamie Dimon said that the plan is aimed at speeding up investments in these critical industries where the US and its allies have become hampered domestically and overly reliant on foreign supply chains.

“It has become painfully clear that the United States has allowed itself to become too reliant on unreliable sources of critical minerals, products and manufacturing — all of which are essential for our national security,” Dimon said in the press release.

“Our security is predicated on the strength and resiliency of America’s economy. America needs more speed and investment,” Dimon added, noting that “excessive regulations,” “partisan gridlock” and the education system have all hampered such efforts.

JPMorgan had already planned to commit $1 trillion over the next decade to such areas as aerospace, defense, energy, manufacturing, and emerging technology. This initiative adds another $500 million, along with the $10 billion worth of investments.

The Trump administration has been ramping up efforts to secure these same industries in the US as it spars with China over trade negotiations. In recent months, the government has taken equity stakes in public companies like semiconductor giant Intel (INTC), rare earth producer MP Materials (MP), and Canada-based mining company Trilogy Metals (TMQ).

JPMorgan provided MP Materials, the country’s largest rare earth producer, with financing over the summer. It also counts Intel as a client.

The US Pentagon is also looking to stockpile as much as $1 billion of critical minerals, according to a Financial Times report that cited public filings published by the Defense Logistics Agency.

JPMorgan said it will hire more bankers, investment professionals, and other experts while leaning on research efforts from its asset and wealth management division, as well as its newly formed geopolitics advisory service.

As part of the effort, the bank said it will target government advocacy to encourage faster growth in these key industries and form an external advisory committee of public and private sector leaders to help guide the strategy.

JPMorgan’s stock rose 1% following the plan announcement. The company reports its third quarter earnings on Tuesday morning.

“Hopefully, once again, as America has in the past, we will all come together to address these immense challenges,” Dimon said.

“We need to act now,” he added.

David Hollerith covers the financial sector, ranging from the country’s biggest banks to regional lenders, private equity firms, and the cryptocurrency space.

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