Business

Why insurer Nationwide is investing $1.5 billion through 2028 on AI and other tech initiatives

Published

3 months ago

October 29, 2025

Almost half of Nationwide’s 22,000 employees are using Microsoft Copilot and other artificial intelligence tools every day. The insurer’s wants that number to hit 90% by 2026.

To make this lofty target a reality, the property and casualty insurance company on Wednesday announced it would invest $1.5 billion through 2028 to support technology innovation initiatives, including $100 million that will be earmarked to advance AI each year for the next three years.

The AI spending will go toward creating and managing AI assistants that will take on more work tasks, training and education, software development, and the underlying infrastructure to ensure that the AI systems that Nationwide relies on are resilient and secure.

Jim Fowler, Nationwide’s chief technology officer, says that the new financial commitment represents a 20% increase from what the company has been spending on an annual basis “in the last couple of years.” Since 2015, Nationwide says that it has invested $5 billion in technology modernization.

It is also indicative of a strategic pivot of Nationwide’s AI Playbook. Four months ago, Fowler says the company’s leadership met and wasn’t pleased to see dozens of AI use cases had proliferated across the organization. While workers were getting more efficient, it wasn’t always clear how they should use their extra time. Ten of Nationwide’s C-suite leaders worked collaboratively to identify 18 flagship AI use cases to prioritize across the business.

“We stepped back and we said, ‘We’ve got to get out of experimentation mode,’” says Fowler.

A few of the flagship AI use cases that Nationwide will be focusing on include a tool that will automate 80% of pets claims, including the resolution of 25% of those claims with an instant settlement. Fowler says this application of AI will create more capacity for the operations team to hunt down new business. For the farm and agricultural insurance business, AI tools are expected to reduce the review time for those claims by 20%.

In recent months, CTOs and chief information officers have pivoted their investment strategies to focus on fewer bets tied to bigger business outcomes. This new approach could help them finally achieve a steadier return on their AI investments, which has proven to be difficult to achieve as enterprises near the three-year mark since the debut of ChatGPT.

“Part of what we’re doing differently, that I see other companies doing, is we’re setting targets that are the ROI,” says Fowler. “And those targets are big enough that even if we don’t get to the full target, we will still be wildly happy with the outcome.”

That includes an efficiency target for Fowler’s own software employees. His goal is to use more AI coding assistant tools to cut the cycle time to write new software by 50%. “I’ve got no shortage in the backlog of demand for technology,” says Fowler, especially given this week’s big new IT investment.

Nationwide, which ranks 72 on the Fortune 500, says it has already scaled six AI initiatives. Those tools include a generative AI claims assistant that can summarize the log notes of complex customer claims. When a claims representative gets in touch with a customer to discuss a large reported loss, it gets a one-paragraph summary to bring them up to speed on the case.

An AI-enabled tool is also being used by developers to help migrate legacy code to new platforms. Fowler says that this tool has driven a 50% reduction in code conversion time for Nationwide’s development teams. That solution was developed during one of Nationwide’s hackathon events.

Already, AI chatbots and other productivity tools have been embraced by some early AI adopters. Nationwide says it has identified around 1,000 employees who had made themselves more productive using AI. While the company wants to continue to encourage that usage, Nationwide also wants to focus more energy and dollars on the flagship ideas.

“What we saw is that with all the experimentation that was going on over the last two-and-a-half years, nothing was scaling,” says Fowler. “I don’t want to take away from the associates the ability to kind of drive their own local productivity, but I want to be more intentional about where we’re going to get scale for bigger solutions.”

Next week, Fowler says that Nationwide will host a symposium for roughly 1,000 employees who have an associate vice president title or above. The company will tap the expertise of both internal and external speakers to talk through expectations for how technology, including AI, will improve operations and the future strategy for every business unit.

These bigger bets on AI from have raised questions about the future of work and surveys have shown workers are worried that they’ll be displaced by the technology. Just this week, Amazon announced it will cut about 14,000 jobs as it accelerates spending on AI.

But AI may not necessarily be a job killer at Nationwide. Fowler says that the company’s sales have grown 50% over the last five years and “we’re really not expecting that to slow down.” His hope is that AI and other innovative technologies will make it easier to generate more business.

“This isn’t just an efficiency play,” explains Fowler. “AI is not just about productivity.”

John Kell

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NEWS PACKETS

Amazon to cut 14,000 corporate jobs amid AI push. Mere months after Amazon CEO Andy Jassy said that efficiency gains from AI would mean fewer jobs, the tech giant announced a fresh round of layoffs that will reportedly span various departments including logistics, payments, video games, and the company’s cloud computing business. Reuters on Monday had reported that the layoff total could actually affect as many as 30,000, but Amazon says that will increase hiring for some parts of the business and the 14,000 figure represents an overall workforce reduction. The newly planned cuts would surpass the total of the company’s rolling reductions in 2022 and 2023 that led to more than 27,000 corporate job eliminations, as Amazon and other tech giants angled to slim their workforce after a pandemic-era boom in hiring.

Global IT spending is projected to hit a record in 2026. As CIOs are busy preparing their 2026 budgets, it looks like many of these technologies will have a lot more money to invest in generative AI and other technologies, as research firm Gartner projects that global IT spending will surpass $6 trillion. It would be a record amount and indicates a big 9.8% increase in spending from this year, growth that is driven by investments in data center systems and software, both categories that reflect the increased demand for AI. “The cost of software is going up and both the cost of features and functionality is going up as well thanks to gen AI,” said John-David Lovelock, an analyst for Gartner. Gartner also projects that shipments for mobile phones and PCs would be strong next year, but at a slower pace than in 2025.

Alaska Airlines to review IT systems after recent outages. After an IT outage grounded hundreds of flights late last week and caused four days of flight disruptions this summer due to a hardware failure, the airline says it will bring in external experts to review its IT infrastructure. “We are immediately bringing in outside technical experts to diagnose our entire IT infrastructure to ensure we are as resilient as we need to be,” the company said in a statement shared with the Anchorage Daily News. An airline analyst at Raymond James has warned that the IT outage that canceled about 400 flights could cost Alaska Airlines $26 million. Those losses will be included in the company’s fourth-quarter results.

McKinsey warns bank profits could take a massive hit if they don’t adapt to AI. The consulting giant has issued a stark report that warns that AI could erode the banking industry’s profitability by $170 billion, or 9%, over the course of the next decade, as consumers will embrace AI agents instead of humans to handle some of their financial services needs. Bloomberg notes that while the banking sector is set to generate cost savings between 15% to 20% from investments in AI, McKinsey has warned that competition from AI will likely erode those gains and that most of the benefits will be accrued by customers.

ADOPTION CURVE

Leaders are bullish on the ROI for agentic AI despite tech being in early stages of deployment. While some recent studies have poured cold water on the promised ROI of AI, an agentic AI-focused survey published Wednesday from data intelligence company Collibra and The Harris Poll took a far more bullish stance. 86% of respondents say they were “confident” that agentic AI will drive ROI for their total organization, with similar proportions confident that their investments in the technology will spur innovation (85%) and governance (84%). The survey polled more than 300 data management, privacy, and AI decision makers from U.S.-based companies.

Nine out of ten technology leaders say their organization is currently developing or rolling out agentic AI, though most remain in the very early stages of developing this more autonomous form of the technology. When asked about implementation methods, a clear majority are relying on vendors or third-party partnerships (58%), while 49% are building their own agentic systems internally.

Collibra CEO and founder Felix Van de Maele tells Fortune that many enterprises will build their AI agents on top of platforms offered by Salesforce, ServiceNow, SAP, and others, but that this approach will come with challenges related to tracking an explosion in the number of agents that will be deployed, data reliability, and securely monitoring what actions they are authorized to take.

“If something goes wrong, the impact is much bigger,” says Van de Maele. “The stakes are higher and so the governance of that is going to be important.”

Courtesy of Collibra

JOBS RADAR

Hiring:

– USPTO is seeking a CIO, based in Alexandria, Virginia. Posted salary range: $150.2K-$225.7K/year.

– Premier America Credit Union is seeking a CTO, based in Los Angeles. Posted salary range: $237.1K-$375K/year.

– URBN Dental Implants & Invisalign is seeking a CTO, based in Houston. Posted salary range: $100K-$150K/year.

– Covered California is seeking a CTO, based in Sacramento County, California. Posted salary range: $12.1K-$14.5K/month.

Hired:

– F5 named Michael Montoya as chief technology operations officer, where he will lead the enterprise-wide strategy for the cybersecurity company. Montoya’s appointment also comes as F5 says it will advance a “comprehensive security initiative” after it disclosed a system breach by a “nation-state threat” actor earlier this month. Montoya previously held chief information security officer roles at Equinix and Digital Realty.

– First Financial Bankshares appointed Tim Brown as EVP and CIO, succeeding John Ruzicka, who has served as CIO since 2018 and will transition to the role of chief banking operations officer. Brown joins the Texas-based bank from community bank Johnson Financial Group and previously spent 30 years at the insurance and banking services company USAA.

– The Lovesac Company announced the appointment of Jacob Pat as chief technology and digital transformation officer. Pat joins the furniture retailer after most recently serving as VP of product at Salesforce following its acquisition of PredictSpring, where he led global product for retail cloud. He also previously served as CTO at beauty company Deciem, which Estée Lauder acquired last year.

– RTX Fintech named Minor Huffman to serve as CTO for the finance broker, overseeing the company’s global tech strategy and leading new infrastructure developments to support the platform’s growth. Prior to RTX, Huffman founded TIBBS Consulting, which advises fintech clients on trading technology. He’s also previously held leadership roles at banking giants Credit Suisse and JPMorgan.

– Envestnet has named Bhaskar Peddhapati as CTO, where he will oversee all aspects of technology, engineering, and information security for the wealth management software provider. Most recently, Peddhapati served as SVP and head of mortgage technology solutions at IT provider Cotality and spent more than a decade at research firm NielsenIQ, including serving as global head of technology.

– Maris-Tech has promoted Hananya Malka to the role of CTO, succeeding Magenya Roshanski, who is retiring from the developer of video and AI-based edge computing technology. Malka has worked at Maris-Tech for 15 years, most recently serving as research and development manager.

– Schellman announced the appointment of Abhi S. Visuvasam as CTO, overseeing the technology strategy, AI development and integration, and innovation for the IT compliance company. Visuvasam has held technology leadership roles at IBM, Accenture, and most recently at cloud master data management provider Reltio, where he served as field CTO for enterprise architecture and solutions.

– Waypoint Bio appointed Patrick Kaifosh as CTO, joining the biotech company after previously leading research as director of research science at Meta and co-founding CTRL-Labs, which was acquired by Meta in 2019. At Waypoint, Kaifosh will lead the stronger integration of machine learning, robotics, and spatial biology to support the development of cell therapies for solid tumors.

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Americans are paying nearly all of the tariff burden as international exports die down, study finds

Published

14 minutes ago

January 20, 2026

Jace Porter

After nearly a year of promises tariffs would boost the U.S. economy while other countries footed the bill, a new study shows almost all of the tariff burden is falling on American consumers.

Americans are paying 96% of the costs of tariffs as prices for goods rise, according to research published Monday by the Kiel Institute for the World Economy, a German think tank.

In April 2025 when President Donald Trump announced his “Liberation Day” tariffs, he claimed: “For decades, our country has been looted, pillaged, raped, and plundered by nations near and far, both friend and foe alike.” But the report suggests tariffs have actually cost Americans more money.

Trump has long used tariffs as leverage in non-trade political disputes. Over the weekend, Trump renewed his trade war in Europe after Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland sent troops for training exercises in Greenland. The countries will be hit with a 10% tariff starting on Feb. 1 that is set to rise to 25% on June 1, if a deal for the U.S. to buy Greenland is not reached.

On Monday, Trump threatened a 200% tariff on French wine, after French President Emmanuel Macron refused to join Trump’s “Board of Peace” for Gaza, which has a $1 billion buy-in for permanent membership.

“The claim that foreign countries pay these tariffs is a myth,” wrote Julian Hinz, research director at the Kiel Institute and an author of the study. “The data show the opposite: Americans are footing the bill.”

The research shows export prices stayed the same, but the volume has collapsed. After imposing a 50% tariff on India in August, exports to the U.S. dropped 18% to 24%, compared to the European Union, Canada, and Australia. Exporters are redirecting sales to other markets, so they don’t need to cut sales or prices, according to the study.

“There is no such thing as foreigners transferring wealth to the U.S. in the form of tariffs,” Hinz told The Wall Street Journal.

For the study, Hinz and his team analyzed more than 25 million shipment records between January 2024 through November 2025 that were worth nearly $4 trillion.They found exporters absorbed just 4% of the tariff burden and American importers are largely passing on the costs to consumers.

Tariffs have increased customs revenue by $200 billion, but nearly all of that comes from American consumers. The study’s authors likened this to a consumption tax as wealth transfers from consumers and businesses to the U.S. Treasury.

Trump has also repeatedly claimed tariffs would boost American manufacturing, butthe economy has shown declines in manufacturing jobs every month since April 2025, losing 60,000 manufacturing jobs between Liberation Day and November.

The Supreme Court was expected to rule as soon as today on whether Trump’s use of emergency powers to levy tariffs under the International Emergency Economic Powers Act was legal. The court initially announced they planned to rule last week and gave no explanation for the delay.

Although justices appeared skeptical of the administration’s authority during oral arguments in November, economists predict the Trump administration will find alternative ways to keep the tariffs.

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Selling America is a ‘dangerous bet,’ UBS CEO warns as markets panic

Published

46 minutes ago

January 20, 2026

Jace Porter

Investors are “selling America” in spades Tuesday: The 10-year Treasury yield is at its highest point since August; the U.S. dollar slid; and the traditional safe-haven metal investments—gold and silver—surged once again to record highs.

The CEO of UBS Group, the world’s largest private bank, thinks this market is making a “dangerous bet.”

“Diversifying away from America is impossible,” UBS Group CEO Sergio Ermotti told Bloomberg in a television interview at the World Economic Forum in Davos, Switzerland, on Tuesday. “Things can change rapidly, and the U.S. is the strongest economy in the world, the one who has the highest level of innovation right now.”

The catalyst for the selloff was fresh escalation from U.S. President Donald Trump, who has threatened a 10% tariff on eight European allies—including Germany, France, and the U.K.—unless they cede to his demands to acquire Greenland.

Trump also threatened a 200% tariff on French wine and Champagne to pressure French President Emmanuel Macron to join his Board of Peace. Trump’s favorite “Mr. Tariff” is back, and bond investors are unhappy with the volatility.

But if investors keep getting caught up in the volatility of day-to-day politics and shun the U.S., they’ll miss the forest for the trees, Ermotti argued. While admitting the current environment is “bumpy,” he pointed to a statistic: Last year alone, the U.S. created 25 million new millionaires. For a wealth manager like UBS, that is 1,000 new millionaires a day. To shun that level of innovation in U.S. equities for gold would be a reactionary move that ignores the long-term innovation of the U.S. economy.

“We see two big levers: First of all, wealth creation, GDP growth, innovation, and also more idiosyncratic to UBS is that we see potential for us to become more present, increase our market share,” Ermotti said.

But if something doesn’t give in the standoff between the European Union and Trump, there could be potential further de-dollarization, this time, from Europe selling its U.S. bonds, George Saravelos, head of FX research at Deutsche Bank, wrote in a note Sunday. Indeed, on Tuesday, Danish pension funds sold $100 million in U.S. Treasuries, allegedly owing to “poor” U.S. finances, though the pension fund’s chief said of the debacle over Greenland: “Of course, that didn’t make it more difficult to take the decision.”

Europe owns twice as many U.S. bonds and equities as the rest of the world combined. If the rest of Europe follows Denmark’s lead, that could be an $8 trillion market at risk, Saravelos argued.

“In an environment where the geo-economic stability of the Western alliance is being disrupted existentially, it is not clear why Europeans would be as willing to play this part,” he wrote.

Back in the U.S., the markets also sold off as the Nasdaq and S&P both fell 2% Tuesday, already shedding the entirety of Greenland’s value on Trump’s threats, University of Michigan economist Justin Wolfers noted. Analysts and investors are uneasy, given the history of Trump declaring a stark tariff before negotiating with the country to take it down, also known as the “TACO”—Trump always chickens out—effect. Investors have been “burnt before by overreacting to tariff threats,” Jim Reid of Deutsche Bank noted. That’s a similar stance to the UBS bank chief: If you react too much to headlines, you’ll miss the great innovation that’s pushed the stock market to record highs for the past three years.

“I wouldn’t really bet against the U.S.,” he said.

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Trump added $2.25 trillion to the national debt in his first year back in charge, watchdog says

Published

1 hour ago

January 20, 2026

Jace Porter

Trump’s first year back in the White House closed with the U.S. national debt roughly $2.25 trillion higher than when he retook the oath of office, showing how fast Washington’s red ink is piling up even amid DOGE hype and promises to pay it down. Over the calendar year 2025, the growth in the national debt was even higher, some $2.29 trillion.

The acceleration in borrowing, with the national debt standing at $38.4 trillion and growing as of January 9, is sharpening warnings from budget watchdogs and Wall Street alike that the country’s fiscal path is becoming a growing vulnerability for the economy. The total national debt has grown by $71,884.09 per second for the past year, according to Congressman David Schweikert’s Daily Debt Monitor.

Over the 12 months from the close of trading on Jan. 17, 2025, to the end of day Jan. 15, 2026, the federal government added approximately $2.25 trillion to the national debt, according to calculations shared exclusively with Fortune by the Peter G. Peterson Foundation. That period roughly captures President Donald Trump’s first year back in office, as it is the last business day before last year’s Inauguration Day and the most recent day for which data are available. The jump from $37 trillion to $38 trillion in just two months between August and October was particularly notable, with the Peterson Foundation calculating at the time that it was the fastest rate of growth outside the pandemic. Michael A. Peterson, CEO of the nonpartisan watchdog dedicated to fiscal sustainability, told Fortune at the time that “if it seems like we are adding debt faster than ever, that’s because we are.”

As for how these figures compare to recent presidencies, the Peterson Foundation provided calculations (below) for each calendar year over the last quarter-century, revealing that President Joe Biden owns the highest year of national debt growth outside the pandemic, with almost $2.6 trillion in 2023. President Trump far and away holds the record, with nearly $4.6 trillion of national-debt growth occurring during the pandemic year of 2020, when massive federal spending occurred in the form of economic relief measures.

Trump and Biden together own the top five highest-debt-incurring years, two for Trump and three for Biden, across five of the last six years. While the figures are not adjusted for inflation, by and large, Trump and Biden have roughly doubled the rate of debt accumulation under President Barack Obama and tripled, even quadrupled the rate of growth under President George W. Bush, depending on which term you’re looking at. To be sure, both Bush and Obama presided over the aftermath of the Great Recession of 2008, with experts still debating whether their fiscal responses were large enough.

Interest costs explode

The surge in debt is landing just as interest costs on that debt become one of Washington’s fastest‑growing expenses. The specific line item for net interest in the federal budget totaled $970 billion for fiscal year 2025, but the Congressional Budget Office (CBO) calculated that, including spending for net interest payments on the public debt, this broke the $1 trillion barrier for the first time. The Committee for a Responsible Federal Budget, another nonpartisan watchdog, projects $1 trillion per year in interest payments from here on out.

Trump has repeatedly argued that his ambitious tariff program will be enough to tame the debt burden, casting duties on imports as a kind of magic revenue source for Washington. Treasury data show tariffs are bringing in significantly more money than before—likely in the $300 billion to $400 billion‑a‑year range—but even optimistic projections suggest those sums only cover a fraction of annual interest costs and an even smaller slice of total federal spending. As Trump retreated from many of his tariff threats—before the January 2026 spike that he threatened in relation to his desire for U.S. possession of Greenland—the CBO calculated that $800 billion of projected deficit reduction had also vanished.

At the same time, the administration has promised to share some of that tariff revenue directly with households through a proposed $2,000 “dividend” for every American, a pledge that independent analysts estimate could cost around $600 billion per year and further widen the deficit unless offset elsewhere. Economists say that the combination—more borrowing, high interest rates, and new permanent commitments—risks locking in structural deficits that keep the debt rising faster than the overall economy.

Markets and America’s ‘Achilles’ heel’

Financial markets are taking notice. As Washington auctions hundreds of billions of dollars in new Treasury securities each week, yields on longer‑term notes and bonds have moved higher, reflecting both tighter monetary conditions and investor unease about the sheer volume of U.S. borrowing. Recent analysis from Deutsche Bank and others has described America’s mounting debt load as an “Achilles heel” that could leave the dollar and broader economy more vulnerable to shocks, particularly as geopolitical tensions and tariff fights escalate.

Those worries are amplified by the prospect of future recessions or emergencies that could force the government to borrow even more heavily on top of today’s already‑elevated baseline. Rating agencies and international lenders have not sounded any immediate alarm about U.S. solvency, but they have increasingly highlighted fiscal risks in their outlooks, pointing to widening deficits and a political system that has struggled to impose discipline.

Voters are paying attention

If there is one thing Americans still broadly agree on, it is that the debt problem matters. Recent polling sponsored by the Peterson Foundation found that roughly 82% of voters say the national debt is an important issue for the country, even as they remain divided over which programs to cut or taxes to raise.

Trump first won office vowing to erase the national debt over time; a decade later, after his return to power, that figure has instead climbed to record highs. As the administration prepares for another year of governing—and another season of fiscal showdowns on Capitol Hill—the question is shifting from whether the debt is growing too fast to how long the world’s largest economy can keep outrunning its own balance sheet.

For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.

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