BlackRock CEO Fink: If investment opportunities do not sink, the prosperity of AI will exacerbate economic inequality.

BlackRock CEO Lawrence Fink warned that the AI boom threatens to make wealthy companies and investors even richer, while exacerbating inequality, unless more individuals can share in the benefits of market growth. Fink said in his annual letter to investors on Monday, "Over the past few generations, the vast wealth created has mostly flowed to those who already own financial assets," "Now, AI threatens to replicate this pattern on an even greater scale." The head of the world's largest asset management company wrote that although AI will disrupt the labor market - creating new jobs while replacing many other workers - the technology "will create significant economic value". He encouraged individuals to make long-term investments in this potential growth process, calling it "both a challenge and an opportunity". Fink said, "Too many people are left out," his company managing over $14 trillion in client funds. "When total market values rise but ownership remains concentrated in the hands of a few, the prosperity feels even more out of reach for those on the outside." Fink stated that one of the most important ways to give more people the opportunity to share in the benefits is to reform the US Social Security system. Individuals can begin receiving benefits as early as age 62, while those born after 1960 have a statutory retirement age of 67. At 73 years old, Fink said, "Social Security provides stability, but it does not allow most Americans to accumulate wealth in a way that grows with the nation." While he expressed opposition to privatizing Social Security or investing all its funds in the stock market, Fink believed that a rethink of the program is needed before it runs into trouble and is unable to pay expected retirement benefits to account holders. Currently, the Social Security trust funds are invested in US Treasury bonds, and Fink suggested discussing diversifying these investments. However, he noted that significant changes to the system would be difficult to achieve. "Social Security is a core promise, and people rightfully expect it to be fulfilled," Fink wrote, "But under the current system, inaction would likely violate that promise." Since Fink began writing his highly anticipated annual public letters to corporate executives, shareholders, and investors over a decade ago, BlackRock's client assets have soared, making it a major player in global equity, private assets, and bond markets. After meeting investors' demand for low-cost index funds for a decade, BlackRock has long been a leading force in publicly traded equity and bond investments. Additionally, BlackRock has transformed through acquisitions to catch up in private market investments. Fink has invested around $28 billion in acquiring Global Infrastructure Partners (GIP), private credit specialist HPS Investment Partners, and data provider Preqin. Currently, BlackRock has begun partnerships with leading technology companies, investing in AI, data centers, and the energy needed to power them. Last year, investors led by GIP agreed to acquire Aligned Data Centers for $40 billion, one of the largest infrastructure investments the company has ever made, amid Wall Street's rush to invest in the AI boom.