BlackRock CEO Larry Fink has identified a significant economic risk linked to the artificial intelligence boom, noting that government deficits and private sector demand are competing for a limited supply of capital. This competition threatens to increase borrowing costs for both businesses and households.
Fink highlighted that US federal debt has reached a record $40 trillion. The 10-year Treasury yield, which serves as a benchmark for business loans and mortgages, has increased by approximately 1.2 percentage points this year, reaching 5.34% earlier this month, the highest level since 2002.
To address the funding gap, the BlackRock CEO proposed three primary strategies. He suggested securitizing computing infrastructure to attract more investors, accelerating the development of power generation capacity, and increasing the number of long-term retail investors in the market.
Fink remains optimistic about the long-term potential of AI, suggesting that some companies could eventually reach valuations of $10 trillion each. He emphasized that with improved financing mechanisms and faster infrastructure permitting, the economy can support the necessary growth.
