JPMorgan Chase spends $500 million to build a data center, according to CEO Jamie Dimon. That figure places the firm’s facilities among the most expensive in the industry, on a par with investments by Google and Microsoft in their largest data centers.
Dimon noted the company’s data center investments in an interview with New York magazine, in which the CEO cited such spending as one of the advantages of the banking company’s massive scale.
“There are huge benefits to size,” Dimon said. “We bank Caterpillar in like 40 countries. We can do a $20 billion bridge loan overnight for a company that’s about to do a major acquisition. Size lets us build a $500 million data center that speeds up transactions and invest billions of dollars in products like ATMs and apps that allow your iPhone to deposit checks.
“These aren’t, like, little things,” Dimon continued. “And they accrue to the customer. That’s what capitalism is.”
Big Firms, Big Investments
Wall Street firms have always invested heavily in their data center infrastructure. But they don’t often talk about the details of those facilities or investments. JPMorgan Chase operates two large data centers in Delaware and a 400,000 square foot facility in Bergen County, N.J. It also acquired data center properties in its deals for distressed rivals Bear Stearns and Washington Mutual in the early days of the 2008 financial crisis.
Spending $500 million per facility places JPMorgan in the top tier of data center investments. Microsoft spent $500 million on its web-scale data centers, while Google valued its data center investments at $600 million per campus. The largest known single-site data center investment is the $1 billion Apple says it will spend on its massive iDataCenter in Maiden,North Carolina.
In the New York interview, Dimon also sought to create “perspective” on the significance of the $5.8 billion in trading losses that JPMorgan faces in its London trading operation, apparently due to the activities of a single trader known as the “London Whale.”
“It’s such a large number, but if you put it in perspective a little bit … We didn’t even lose money this quarter,” said Dimon. “We earned $5 billion. The analysts estimate us having a record year.”
Here’s another perspective, seen through our infrastructure-centric prism here at DCK: The money lost by the Whale was enough to build 11 more of those $500 million data centers.