BlackRock discussing potential investments with governments to fuel AI development

BlackRock CEO Larry Fink has raised concerns about the need for increased power supply to support critical investments in artificial intelligence (AI) during a meeting of the B7 business groups of the Group of Seven (G7) states in Rome.

Fink highlighted the growing demand for data centres and semiconductor plants that require massive amounts of electricity to power AI technologies. He emphasized that the G7 countries do not currently have enough power to support the development of AI data centres, posing a competitive challenge for nations.

The CEO stressed the importance of private investors, such as pension funds and insurers, in funding the trillions of dollars needed to build data centres and chip factories for AI technologies. Fink also mentioned the need for state subsidies in areas where energy costs are not competitive to attract investments.

Japan recently announced a projected 35% to 50% increase in electricity output by 2050 to meet the demands of semiconductor plants and data centres supporting AI.

Fink is in talks with various governments to explore ways to bring in private capital for these critical investments, as he believes that the G7 states cannot bear the financial burden alone without risking a fiscal crisis that could impact future generations.

The discussions at the B7 meeting in Rome precede the upcoming gathering of finance ministers and central bankers from the G7 economies in Italy next week. The focus on funding AI infrastructure highlights the importance of collaboration between the public and private sectors to drive innovation and economic growth in the digital age.