"Not building data centers is more inflationary!" BlackRock CEO warns: Slower AI expansion is the real risk

BlackRock, Inc. (BLK.US) CEO Larry Fink warned that as artificial intelligence (AI) demand accelerates, delays in data center construction could drive up computing costs and threaten economic growth. "If we don't build data centers faster, it's actually more inflationary, because the cost of computing right now is just too high," Fink said in an interview during the Berlin Global Dialogue event on Wednesday. "And the faster we build more data centers, the more abundant the computing supply, the faster computing prices can come down." Fink, 73, said slowing the expansion of this technology would have broader consequences. "If we slow down the buildout of this technology, I think it would genuinely jeopardize the economy." In recent weeks, investor anxiety about the sustainability of the AI boom has intensified, driven by concerns that the massive upfront capital expenditure required by the technology will take longer than expected to profits and productivity gains. Fink had previously downplayed concerns about an AI bubble, instead pointing to supply shortages and saying demand growth has exceeded expectations. He also warned that delays in the technology buildout could ultimately limit access to the technology. "We're now at a moment where we can finally unlock private capital, and so the competition for capital is among the most intense I've seen in my career," Fink said on Wednesday. Fink's remarks come as inflation in major economies is reaccelerating, U.S. Treasury yields have hit multi-decade highs, and markets are grappling with a U.S. fiscal deficit of nearly $2 trillion. Fink said bond yields are "flashing" a warning signal: "Wake up, federal government. Our deficits are starting to cause real problems."