MW 'Like 10 Manhattan Projects going off all at once.' How AI is rewiring the global economy, says this BlackRock exec.
By Barbara Kollmeyer
The AI trade is reshaping the global economy, says BlackRock's head of tech investing
AI has the whole world economy in its hands, says a BlackRock executive.
Artificial intelligence isn't just driving the stock market, it's rewiring the entire global economy.
That's our call of the day from the head of BlackRock's fundamental equities global technology team, Tony Kim, who says the AI trade has staying power because it's totally rewiring the global economy.
"The trade continues because it's the equivalent of 10 Manhattan Projects going off at the same time. This is the new reality," Kim said on a panel at the Milken Institute's global conference in Los Angeles on Monday. "You have five foundation labs in the U.S., five in Asia and China, and each one is the equivalent of a Manhattan Project."
Of the $110 trillion in global GDP, AI capital expenditure represents $1 trillion this year, with another $7 trillion to $8 trillion more capex added in the next five years, he noted. The message is that AI is driving a fraction of the global economy now, but that will only get bigger, he said.
"I think people need to just get over it. This is the new reality."
Read: Big Tech's $700 billion spending on AI this year is called the 'greatest capital misallocation in history'
To make his global-reshaping point, Kim dug into an explanation of the so-called AI stack. The bottom layer is the physical part of AI - compute, chips, data centers and power - where much of AI value lies and capex is being spent. "Nine of the ten biggest companies in the world build chips. The only one that doesn't is Aramco," he said.
Kim said the global economy is transitioning to a "token economy," with AI output the product. "Tokens are revenue, and to build the token economy you need to build these token factories."
The second layer is the intelligence or model layer, with SpaceX, Anthropic, OpenAI and others worth $1 trillion each or more. At the top, which is two-thirds of global GDP, he said, are services and applications where "the jury is out."
Year-to-date, he said $8 trillion in value has been added to both the foundation model and compute layers, but the top layer has lost $1 trillion to $2 trillion in market cap.
"So you're seeing the market also rewire itself to this stack. Why does this continue? It is the refactoring of the global economy to what I call this AI-token economy. And many of the truths we held before AI are being questioned," he said.
As for the state of software, following the sector's implosion earlier this year, Kim said it's "both dead and we'll have more software than ever."
He explained that the 20-year era of software-as-a-service, or SaaS, ended in 2023. "In the world post AI, in the last three or four years, we'll have more software created now than ever in all humanity. Twenty-four seven, the generation of tokens and code will be near infinite. You'll have billions and billions of agents generating code."
"That's what we're seeing. We're seeing the market adjudicate moats. What's the moat? It's not just the moat of software, it's basically every industry in the S&P 500. It started in software but what you thought was perceived moats and duration, quality and all of these things are being questioned. If you have a world where there's infinite code, DIY customization, where is your moat?" Kim said.
Kim also said companies that achieve the type of scale, such as OpenAI's potential $1 trillion market valuation will "basically suck the market cap out of all others.
"My view is that value is accruing to those who exhibit these power-law winners. It's coming at the expense of those who do not. I think you're going to see more and more dispersion, in every industry," he said.
As for the losers? "There's a backlog of a 1000 unicorns that were build in the pre-AI era that will never exist," Kim said.
The markets
U.S. stock futures (ES00) (YM00) (NQ00) are rising and oil prices (BRN00) (CL00) are lower.
Key asset performance Last 5d 1m YTD 1y S&P 500 7200.75 0.37% 8.91% 5.19% 27.44% Nasdaq Composite 25,067.80 0.73% 13.96% 7.86% 40.48% 10-year Treasury 4.43 7.70 13.00 25.80 12.80 Gold 4564.4 -0.98% -3.56% 5.36% 32.62% Oil 103.89 4.28% -5.88% 80.96% 76.08% Data: MarketWatch. Treasury yields change expressed in basis points
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-Barbara Kollmeyer
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May 05, 2026 06:58 ET (10:58 GMT)
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