“It's more inflated if you don't build a data center!” BlackRock CEO Warns: Slowing AI Expansion Is a Real Risk

The Zhitong Finance App learned that BlackRock (BLK.US) CEO Larry Fink warned that as demand for artificial intelligence (AI) accelerates, delays in data center construction may drive up computing power costs and threaten economic growth.

“If we don't speed up the construction of data centers, it will actually be more inflationary, because the current computing costs are too high,” Fink said in an interview during the Berlin Global Dialogue on Wednesday. “And the faster we build more data centers, the more adequate the supply of computing power, the faster the price of computing power will fall.”

Fink, 73, said that slowing the expansion of the technology would have wider consequences. “If we slow down the pace of construction of this technology, I think it will really jeopardize the economy.”

Investors' anxiety about the continuation of the AI boom has intensified in recent weeks as the market is concerned that the large-scale upfront capital expenditure required for the technology will take longer than expected to translate into increased profits and productivity.

Fink had previously downplayed concerns about the AI bubble, pointing to supply shortages and saying demand growth had exceeded expectations. He also warned that delays in technology construction could eventually limit the accessibility of technology.

“We are now at a point where we can finally release private capital, so the intense competition for capital is the rarest I've seen in my career,” Fink said on Wednesday.

At the time Fink made these remarks, inflation in major economies was accelerating again, US Treasury yields had reached a high point in decades, and the market was dealing with a US fiscal deficit of nearly 2 trillion US dollars.

Fink said bond yields are “flashing” warning signs: “Wake up, federal government. Our deficit is starting to cause real problems.”