On Friday, the CEO of BlackRock, the world’s largest asset manager, announced that the company is in talks with multiple governments regarding funding crucial investments to support artificial intelligence (AI) advancements, particularly in boosting power supply.
AI is anticipated to significantly enhance global productivity, but this progress will require substantial electricity for data centers and semiconductor manufacturing.
Speaking virtually at the B7 business groupings of the Group of Seven (G7) states during their conference in Rome, BlackRock CEO Larry Fink emphasized, “These AI data centers are going to require more power than anything we could ever have imagined. We at the G7 do not have enough power.”
Fink highlighted the competitive challenge this power demand poses for countries, noting that data centers will likely be built in regions with cheaper power, thus requiring government subsidies in areas where energy costs are higher.
BlackRock estimates that constructing data centers and chip factories essential for AI technologies will necessitate investments in the trillions of dollars. Fink pointed out that private investors must be involved, suggesting that this presents a significant opportunity for insurers and pension funds.
In response to the growing demand from semiconductor manufacturers and AI-supporting data centers, Japan announced on Tuesday that it expects power output requirements to increase by 35% to 50% by 2050.
Fink added, “We’re in conversations with many governments right now about how we can bring in private capital,” but noted that the fear of a “fiscal crisis” prevents G7 states from shouldering the entire cost.
He warned, “The deficits we’re seeing in the G7 are becoming a burden for my children, your children, our grandchildren.”
