In his dozen years running Royal Bank of Canada, Dave McKay has transformed it from a domestic heavyweight into one of the world’s most valuable banks, recently overtaking (again) Goldman Sachs Group Inc. in market cap. Now, McKay, a computer programmer by training, is steering RBC through a new set of obstacles, from the rise of artificial intelligence to a continued chill in the critical US-Canada relationship. This interview was edited for clarity and length. ① How have strained ties between the US and Canada affected RBC’s business, or Canada’s economy overall?

They’ve slowed growth in a couple of areas. Consumers are putting off buying homes because of the uncertainty, and investment has slowed. We’ve also seen job losses in some of those core sectors. It has probably taken more than a percentage point off economic growth. Yet Canadian consumers have been incredibly resilient, and the service sector is doing well. People who aren’t buying homes are spending on travel, hospitality and entertainment. Those sectors create a lot of jobs and help keep the country going. But, yes, the tension has had an impact.

② Alberta just rejected the idea of separating from Canada this time, but separatist sentiment has been a real political concern in the province that’s at the heart of Canada’s oil and gas sector. You’ve spoken with Canadian Prime Minister Mark Carney about Alberta’s grievances. What have those conversations focused on?

They’ve been about why there’s discontent and whether we’ve addressed it appropriately. That discontent stems from a decade in which the federal government under [Justin] Trudeau blocked access to resources through tanker bans and emissions caps, even as countries including Japan, South Korea and Germany were asking Canada for energy. There has been a fundamental shift under the Carney government toward using our resources to support our allies and partners, diversifying the economy and creating prosperity. I think Alberta recognizes the prime minister’s commitment to getting those resources to market. ③ What ways are you using AI at the bank?

I have my own CEO agent, a suite of agents. I haven’t disclosed everything we’re building, but that suite is leading-edge. I have it tell me each morning what happened overnight and what important data is coming out that day. I use it to look at consumer behavior, markets, the economy and risk. I compare what other people are saying with what my own team is saying and look at different forecasting horizons. It also lets me drill into the organization without calling people to run report after report.

I can operate five times faster and understand data trends and work through questions and answers. ④ What’s the biggest threat to banking over the next 10 years that people aren’t paying enough attention to?

I worry about long-term yields and the supply and demand for debt. There’s insatiable demand for debt right now, to fund government deficits across the Western world, the AI boom and growth in the economy. That’s putting pressure on bond and equity markets to provide the funding. The inflationary impact on the economy and on long-term yields could be problematic. I worry about the fundamental soundness of our finances, particularly at the government level.

⑤ RBC was the only Canadian bank among the nearly two dozen bookrunners on the SpaceX initial public offering. How are you thinking about the next wave of AI IPOs, including Anthropic’s?

Some IPOs haven’t done well. That doesn’t mean Anthropic won’t do well — it’s a market leader — but there’s a lot of uncertainty around future revenue and the cost of building the infrastructure. Demand is changing, and companies are trying to work out how people will use these products and what they’ll pay for them. That makes cash-flow forecasts harder and valuations more uncertain. Pricing is a big part of that uncertainty. Some AI providers are considering taking a share of the savings their technology generates for customers rather than charging a fixed price, but it’s not clear companies will accept that model.

Will a company pay Anthropic 30% of the savings? Maybe some will, but if they feel they’re giving away too much, they have an incentive to negotiate the price down or find another solution.