Banking titan JPMorgan says investor anxiety about artificial intelligence is triggering sell-offs that may be missing a major long-term trend.
In a new note, the bank’s private banking division says markets often react to AI breakthroughs by assuming entire industries will soon disappear.
“It’s become a familiar pattern: A new artificial intelligence model proves it can do a human task. Suddenly, it’s assumed that progress now will make certain jobs obsolete later. Investors panic.”
According to JPMorgan, one sector hit by the panic is cybersecurity, as investors assume that machines will take over workflows. But the bank believes that AI may ultimately strengthen the sector rather than weaken it amid rising and more sophisticated attacks from threat actors.
“If AI increases efficiency in a traditional office function to the point of making human tasks redundant, imagine what it can do to the frequency and strength of automated attacks…
16% of enterprise cyberattacks are AI-generated, with effects that are 24% worse. Those numbers are growing. The business risks of getting it wrong are simply too high. And the more use cases that AI has, the more fronts enterprises and governments have to defend. At risk are the large language models (LLMs), the data, agents and code, among other ingredients.”
JPMorgan says the combination of AI-driven threats and geopolitical tensions is fueling massive new spending on digital defense.
“Global cybersecurity spending is projected to reach $240 billion in 2026, and grow at an 11% compound annual growth rate to $320 billion by 2029.”
The bank notes that the dynamic ultimately points toward higher long-term investment in cybersecurity.
“It’s a simple formula: more companies and governments use AI. Cyberattacks get more sophisticated and frequent. The technology creates a need to protect more components. Governments spend more on defense and security policy. Fiscal tailwind. AI is used to fight AI. The industry survives and grows.”
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