For the next few years, Bill Demchak’s eyes are trained far away from mergers and acquisitions, and strongly on PNC’s AI growth plans, which he said will cost “hundreds of millions to save billions.”

Banks that don’t own their compute – their own data centers and graphics processing units – will fall behind as artificial intelligence progresses, and that will drive an uptick in mergers and acquisitions, PNC CEO Bill Demchak said.

“We want our own compute and our own data,” Demchak said last week in an interview at the Money20/20 conference in Las Vegas. “I don't want to share it with anybody else. Once you do that, you know the efficiencies that come out of that are fast.”

Many banks won’t be able to reach those efficiencies, Demchak said, because they’re “still running mainframes.” Others have made big bets on the cloud.

“Some people just don't have the investment dollars,” he said. “I think this transformation is going to cause a lot of mergers over the next handful of years, particularly with small banks. A target-rich environment would be my expectation.”

Until then, Demchak’s eyes are trained far away from M&A and strongly on PNC’s AI growth plans, which he said will cost “hundreds of millions to save billions” annually.

“If we did a large deal and spent two or three years vetting everything onto the same platform … at that point you'd have to take a timeout on AI. You run the risk of waking up a couple years later and just being out of date,” he said.

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