To The Moon

BlackRock (BLK.US) Chief Executive Larry Fink warned that delays in data center construction could drive up computing costs and threaten economic growth as artificial intelligence demand accelerates.

"If we don't build out data centers faster, it's actually more inflationary, because the cost of computation is just so high right now," Fink said Wednesday during an interview at the Berlin Global Dialogue event. "The faster we build out more data centers, the more abundant the supply of compute, the faster the price of compute will come down."

Fink, 73, said slowing the expansion of this technology would bring broader consequences. "If we slow down the buildout of this technology, I think it really does imperil 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 translate into profits and productivity gains. Fink had previously downplayed fears of an AI bubble, instead pointing to supply shortages and saying demand growth has exceeded expectations.

He also warned that delays in technology buildout could ultimately limit access to the technology. "We're now at a moment where we can finally unlock private capital, and the competition for capital is as fierce as I've seen in my entire career," Fink said Wednesday.

Fink's remarks came as inflation is re-accelerating in major economies, U.S. Treasury yields have touched multi-decade highs, and markets are grappling with a nearly $2 trillion U.S. fiscal deficit.

Fink said bond yields are "flashing" a warning signal: "Wake up, federal government. Our deficit is starting to cause real problems."