BlackRock chief executive Larry Fink says artificial intelligence will require hundreds of billions of dollars in investment and drive global growth, but warns that the buildout will not be smooth and will include major failures.
In a Bloomberg interview at the World Economic Forum in Davos, Fink says he believes that there’s no uncertainty about AI driving more global growth.
But he warns that AI, like any other tech cycle, will not follow a straight line up and that there will be a massive shakeout along the way.
“But I sincerely believe there is no bubble in the AI space. That being said, like in everything else in capitalism, there’s going to be some big failures. Okay, we always see a rotation, and there’s going to be some huge winners and some losers.”
While Fink believes that the AI trade will eventually witness a huge correction, he notes that the firms collectively pouring trillions of dollars into capital expenditures (CapEx) will ultimately benefit society.
“But do I believe that needed capital to build out AI is one of the great opportunities for the world to come? When you think about the hundreds of billions of dollars of infrastructure that’s necessary, countries are going to have to rebuild their grids. We’re going to have to find new sources of energy…
There’s a strong foundational belief that AI is going to accelerate new sources of power. And if we can have cheap sources of power, abundant cheap sources of power, maybe things that we can’t even think of today through AI, imagine how that could lift the rest of the world.”
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