BlackRock CEO Larry Fink: We, as country, need massive investments in AI (YouTube Video Transcript)

(00:00:00) Your YouTube transcript will appear here (00:00:01) come. I did because we're going (00:00:04) to run out of time. I did want (00:00:06) to just get your take on the (00:00:07) broader AI picture. I mean, the (00:00:09) amount of money by open AI, for (00:00:12) example, as we've been talking (00:00:14) about to companies, just the (00:00:15) the enormity of this capital, I (00:00:17) don't know if you've ever seen (00:00:19) anything like it in your career, (00:00:20) and I'm curious as to how you (00:00:22) view it and whether you think (00:00:24) that those who use the word (00:00:25) bubble are correct in in that (00:00:27) usage. (00:00:28) >> Well, there's a bubble in (00:00:30) investing, but are we inferring (00:00:33) a bubble means a bad thing? But (00:00:34) there is certainly a a (00:00:36) skyrocketing amount of capital (00:00:37) that's being put to work. If (00:00:39) you put it in a framework of (00:00:42) geopolitical positioning, we as (00:00:44) a country need these (00:00:45) investments. If we're going to (00:00:46) be the leader in AI technology. (00:00:48) So as a as an American, I'm (00:00:50) pretty happy that we're (00:00:51) investing this much money. I (00:00:52) want us to be first. So let's (00:00:54) start there. Does that mean is (00:00:57) there going to be some failures (00:00:58) within the confines of these (00:01:00) investments? Absolutely. But I (00:01:02) do believe we are going to have (00:01:04) to invest these huge sums of (00:01:06) money. If you think about it, (00:01:09) investing in AI does not just (00:01:10) mean investing in GPUs and (00:01:12) chips, it means investing in (00:01:14) HVAC and IT, investing in in (00:01:18) power grids and power supplies. (00:01:20) It means employing a lot of (00:01:23) people to to build this out. So (00:01:25) we are talking a trillion and a (00:01:26) half dollars, we estimate just (00:01:28) on data centers and power and (00:01:30) all that. But if you see the (00:01:33) rapid need in advance, I can (00:01:34) say at BlackRock the amount of (00:01:36) information that we are trying (00:01:38) to generate ourselves and the (00:01:39) speed in which we want to (00:01:41) generate, we're spending more (00:01:42) and more on it and we're (00:01:43) getting good results on it. I (00:01:45) believe every major company is (00:01:46) going to have to be spending (00:01:48) more and more on this. I think (00:01:50) some of the investments that (00:01:51) we've seen so far is not on AI. (00:01:53) It's more on cloud and the (00:01:54) power of the cloud. So I do (00:01:56) believe this is I don't believe (00:01:58) this is a bubble, but I believe (00:01:59) this is capital that in most (00:02:01) cases is going to be well spent. (00:02:03) That being said, will there be (00:02:05) 1 or 2 failures in that? (00:02:06) Absolutely. And that's the that (00:02:08) is capitalism. We're going to (00:02:09) have some big winners and we're (00:02:10) going to have some big losers. (00:02:12) And obviously we have to. But (00:02:13) if you have a diversified (00:02:15) portfolio, you're going to be (00:02:16) fine and all that. But and if (00:02:18) you're a stock picker, you (00:02:19) better be picking the right (00:02:20) ones. I'm pretty constructive (00:02:22) on our big hyperscalers, though, (00:02:23) and I do believe the Meta's the (00:02:25) Alphabet's the the Microsofts (00:02:27) are in really good position to (00:02:30) be winners. And you're seeing (00:02:31) the transformation out of (00:02:32) Oracle, what they're doing and (00:02:34) how how Larry is trying to (00:02:36) transform it. Broadcom what (00:02:38) Hock E. Tan is trying to do. I (00:02:40) actually am proud of the US (00:02:41) footprint in this, and I do (00:02:43) believe we're going to need to (00:02:45) spend this money to win on a (00:02:47) geopolitical basis. (00:02:48) >> I don't want to give Jim the (00:02:50) last word here. Last question (00:02:52) to you, Larry. (00:02:52) >> When you've been on, I think (00:02:54) when you've been on the last (00:02:55) couple of times, you've talked (00:02:57) about public private (00:02:57) partnership, the need to be (00:02:59) able to have something bigger, (00:03:00) to be able to attack the the (00:03:02) deficit which continues to grow. (00:03:03) Are you seeing that? And is (00:03:05) this administration helping (00:03:05) that? (00:03:07) >> Well, this administration is (00:03:08) very open to all businesses to (00:03:10) talk to them, to try to find (00:03:12) ways that we can build our (00:03:13) economy. So, you know, there (00:03:15) are many conversations going on (00:03:16) with this administration. That (00:03:18) being said, I mean, you you're (00:03:20) rightly noting that the (00:03:21) greatest risk we have is for (00:03:23) the US economy is our deficits. (00:03:26) And if we do not grow our (00:03:28) economy by 3% a year over the (00:03:30) next ten years, our deficits (00:03:31) are going to overwhelm this (00:03:33) economy and we all know it. If (00:03:34) we can grow our economy by (00:03:36) unlocking private markets, if (00:03:37) we can unlock private capital (00:03:39) and we can grow our economy by (00:03:40) 3%, I'm not worried about the (00:03:43) deficits. That's a big that's a (00:03:44) big leap for our economy, our (00:03:46) scale to grow a 10%, 3% a year (00:03:48) for over ten years. That's a (00:03:49) big issue. And so, you know, we (00:03:52) need to be focusing on how do (00:03:54) we unlock this capital. We need (00:03:55) to focus on how to build this (00:03:57) out. This is why I love this AI (00:03:59) build out why I believe we need (00:04:01) to be building out our grids, (00:04:02) building all this out. This is (00:04:04) the type of stuff that could (00:04:05) power a 3% economy. If you look (00:04:07) at the second quarter results, (00:04:08) 33. 8% GDP in the second (00:04:10) quarter, 50% of that was was (00:04:13) CapEx on technology. You know (00:04:15) what? But when. But if you (00:04:17) compare that to Europe or other (00:04:18) places in the world where the (00:04:20) only country that has this type (00:04:22) of CapEx, that gives me (00:04:24) confidence that we're going to (00:04:25) win. And when I go around the (00:04:27) world and talking about other (00:04:28) economies, when I don't see (00:04:30) that CapEx happening in their (00:04:31) country, I worry about that (00:04:32) future. (00:04:33) >> Well, we have the capital (00:04:34) markets that support it, and I (00:04:35) guess they don't. Larry, we'll (00:04:37) always continue the (00:04:38) conversation. We hope as well. (00:04:39) But appreciate your being her