- Larry Fink said shortages in compute, chips, memory, and power could create a new asset class
- AI infrastructure demand is outpacing supply, leading to shortages, not an investment bubble
- US lacks sufficient power generation and compute capacity for current and future AI needs
Larry Fink, chairman and chief executive officer of BlackRock, said shortages of compute power, chips, memory and electricity could create a new tradable asset class as artificial intelligence adoption accelerates globally.
"We're short power, we're short compute, we're short chips, and there are going to be shortages in all three, and memory," Fink said during a panel discussion Tuesday at the Milken Institute Global Conference in Beverly Hills. "I actually believe a new asset class will be buying futures of compute."
Fink said demand for AI infrastructure was growing faster than expected and supply was struggling to keep pace. He said the market was facing shortages rather than an investment bubble.
"There is not an AI bubble. There is the opposite. We have supply shortages," he said. "Demand is growing much faster than anyone has ever anticipated."
The comments come as technology companies increase spending on data centres, semiconductors, cloud infrastructure and electricity capacity to support AI systems. Fink said the scale of the build-out would require trillions of dollars in investment over the coming years.
He said the United States did not have enough power generation or compute capacity to support current and future AI demand. "We just don't have enough compute power right now," Fink said.
Hyperscaler Spending
Fink said hyperscalers were increasingly seeking financing partnerships for large data centre projects as costs rise.
"We're talking $50 billion to $75 billion for a one gigawatt data centre," he said. He said many large technology companies had started partnering with investment firms instead of directly owning data centre assets because it improved capital efficiency.
Fink said long-term investors including pension funds, insurers and sovereign wealth funds were positioned to benefit from the growth in AI infrastructure spending through stable and extended cash flows tied to large technology companies.
During the panel discussion, Bruce Flatt, chief executive officer of Brookfield Corporation, said the global economy was undergoing a major infrastructure transition driven by AI and cloud computing.
"There will be $10 trillion from power, AI factories, data centres and fibre build-out laid to basically rewire the world for the new economy that's coming," Flatt said.
Fink said governments alone would not be able to fund the infrastructure expansion because of rising deficits and the scale of investment required. He said private capital would play a central role in financing the AI build-out globally.
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