AI Boom Widens U.S. Wealth Divide as Banks Profit

Households in the top income quintile held $56.3 trillion in stocks and mutual funds in the second quarter—87% of all household holdings—as JPMorgan Asset Management warned the K-shaped U.S. economy could persist. Lower-earning households are struggling while higher-earning Americans are doing well, the firm said. It expects capital gains to grow faster than labor income in coming years.

Who will benefit from the AI boom remains unclear. JPMorgan estimates AI could lift U.S. total factor productivity growth to about 1.2% annually in its base case, but the firm said it isn't clear how those gains will reach lower- and middle-income Americans. The S&P 500 has risen 70% in five years.

Who Benefits From the Boom

The post-pandemic AI boom has delivered wealth to asset owners, while people without stocks have missed out, according to the JPMorgan report. Even higher-earning Americans show signs of pulling back on spending amid hotter inflation and high gas prices. That’s a warning sign.

The biggest investment banks have also seen a surge in revenue. The five largest generated about $67 billion in equities revenue through Sept. 30—$7 billion more than they earned during all of 2025, which was itself a record. Goldman Sachs, JPMorgan Chase and Morgan Stanley accounted for $52 billion, nearly 80% of the total.

Banks have extended loans to hedge funds through prime brokerages, which provide margin loans, securities lending and other trading services. Executives said demand for leverage to invest in AI hardware, hyperscalers and chip suppliers reached new highs. Goldman’s equities financing revenue rose 96% in the third quarter to a record $3.37 billion. JPMorgan and Morgan Stanley reported a similar trend.

JPMorgan CFO Jeremy Barnum described “insatiable demand for capital” and said, “In this moment where AI is such an overwhelming theme ... there is capital being tapped through all kinds of different mechanisms.” Executives said equities desks at the three leading banks have become more durable, high-margin lending businesses.

Leverage and Market Exposure

The International Monetary Fund warned rising leverage, crowded positions and correlated selling by hedge funds could threaten stability. It estimated global hedge-fund assets at $13 trillion. JPMorgan CEO Jamie Dimon said in August that industrywide leverage was “the highest it's ever been,” though he stopped short of saying it threatened financial markets.

The Trump administration eased some leverage rules for the largest U.S. banks. Regulators finalized the revised rules in 2025, and banks could adopt them as early as January; they loosened balance-sheet caps that had treated Treasurys and collateralized prime-brokerage loans like riskier assets. Stanford University finance professor Darrell Duffie said, “Capital did go down, so you have to say the system is somewhat more levered because of the relaxation in regulations.” He added, “It's not a good idea, but it hasn't gotten dramatically out of whack.”

Risks to the Outlook

JPMorgan called a miscalculation in the balance between capital and labor “the greatest risk” to its outlook. Workers could demand more resources than economists expect, the bank said, destabilizing the broader economic and financial system. Efforts to redistribute AI-related capital returns could discourage investment, while “widespread capital misallocation” could slow growth if the investment boom fails to raise U.S. productivity significantly.

Market stress has already surfaced alongside the AI trade. The S&P 500 fell 1.1% last Friday during a wave of AI selling, while the Cboe Volatility Index rose from below 16 to above 22 in two hours. On Oct. 12, the SPDR S&P 500 ETF Trust recorded its lowest full-day trading volume since 2003. JPMorgan said the K-shaped economy was “surprisingly durable, but sensitive to stress or shock,” and warned that rewards shifting too far toward either capital or labor could produce bouts of volatility.