AI futures: why the head of BlackRock is waiting for a new instrument to appear on the exchange
Demand for computing power is so great that a separate market for traders could emerge around it, Larry Fink believes
Companies are building up capacity needs faster than the industry has time to build it, says Larry Fink / Photo: Unsplash / Scott Rodgerson
Computing power may become a new asset class on the stock exchange, according to Larry Fink, CEO of BlackRock, the world's largest investment company. At the Milken Institute conference, he said that the basis for such a market is already forming: demand for AI infrastructure is growing faster than supply, and the economy lacks energy, chips, memory and computing power itself.
Computing as a new type of asset
Larry Fink believes that the shortage of computing power can become an investment opportunity: a separate market can emerge around this resource.
"I actually believe that a new asset class will be the purchase of computing futures. Right now, we just don't have enough computing power. Think about how many tokens you need to analyze for, say, your cybersecurity. Those are colossal volumes, and we all read about the problems there. And that's exactly where the huge opportunity lies - the amount of resources that should be going there. We're trying to address some of those deficits, but I don't believe we're moving fast enough."
AI without overheating
Fink assesses the boom around AI not through short-term quote dynamics, but through the market's ability to build the infrastructure that will support the next stage of the technology's development. Right now, says the head of BlackRock, companies are ramping up capacity needs faster than the energy industry, chip makers and data center operators have time to build it. So he describes the current boom not as overheating, but as a market where physical infrastructure is lagging behind demand.
"There is no AI bubble - we are seeing the exact opposite. There is an acute shortage of supply. Demand is growing much faster than anyone could have predicted"
A trillion-dollar AI build
Behind the supply shortage is a lack of physical infrastructure for AI. A one-gigawatt data center could cost $50-75 billion, Fink says. In the U.S. alone, building the necessary AI infrastructure could require $10 trillion in investment.
In addition, additional funding will be needed to protect data centers. According to Fink, the war in the Middle East has shown that expensive infrastructure is vulnerable to cheap drones. The investor cited placing data centers underground as one method of protection.
"All of these things are actually opportunities, not problems. It's going to require trillions of dollars of capital. Governments can't build all of this on their own. They don't have the funds to do it, and secondly, their deficits have started to grow, and we spend too little time talking about the U.S. budget deficit and the deficits of other countries. So it's all going to fall on the private sector."
Who will pay
According to Fink, major tech companies have rarely turned to the debt market in the past because they generated a lot of cash flow themselves. But building infrastructure for AI is changing that model: data centers, power capacity and computing infrastructure require partnerships with large investment managers that can raise long-term capital for such projects. He estimates that much of this investment will come through debt financing, with private credit playing an important role in building AI infrastructure in the US.
"Ultimately, I believe we will face a capital shortage. And given that more and more countries are seeking to self-distribute their savings within their own borders, this will create further complications. We need to approach this issue much more thoughtfully. But right now, I think this is a rare opportunity for long-term investors to participate in a massive growth cycle that may be a once-in-a-lifetime opportunity"
According to Bloomberg, BlackRock is already investing capital in AI infrastructure - through partnerships with Microsoft, Nvidia and MGX, a UAE-based investment entity. A consortium led by BlackRock-owned Global Infrastructure Partners announced the purchase of Aligned Data Centers for about $40 billion. Another deal is energy-related: GIP, along with investment firm EQT, agreed to buy energy company AES for $10.7 billion in cash.
This article was AI-translated and verified by a human editor
