BlackRock CEO Fink: AI Will Replay the Wealth Divide Script, the Way Out for Ordinary People is to "Get on Board by Holding Stocks"

Caixin News, March 23 (Editor: Niu Zhanlin)
American asset management giant BlackRock CEO Larry Fink warned on Monday that the AI boom poses a risk of widening the wealth gap unless a broader population can share in the market gains.

Fink stated that AI is “the most important technology since the advent of computers,” but also acknowledged that the long-term impact of AI on the U.S. labor market remains an “extremely important issue.” He believes that for ordinary people, it is crucial to invest in and hold a stake in high-quality companies.

The rapid rise of AI has sparked debate over whether its benefits will be widely distributed across industries or further concentrated among large tech firms, thereby increasing the gap with smaller businesses.

Since the release of ChatGPT in November 2022, AI-driven market gains on Wall Street have mostly been led by companies at the center of this boom, pointing to a narrower group of winners.

In his annual letter to shareholders, Fink said, “Most of the enormous wealth created by past generations has gone to those already holding financial assets. Now, AI may repeat this pattern on a larger scale.”

Despite an increase in individual investors entering the market in recent years, participation remains limited, especially in traditional assets related to wealth creation such as stocks.

AI Will Create Massive Economic Value
Fink, who leads the world’s largest asset manager with about $14 trillion in assets under management, uses this highly anticipated annual letter to emphasize the role of capital markets in wealth accumulation and the importance of long-term investing.

“History shows that transformative technologies create enormous value, most of which flows to the companies building and deploying these technologies, as well as their investors.”

Fink states that AI has become an irreversible trend and is a core area of strategic competition among major powers. “The U.S. clearly recognizes that AI leadership is not optional but requires ongoing investment.”

Investors are increasingly worried that the rapid proliferation of AI could disrupt existing business models, especially in traditional software and services sectors, where automation and emerging AI-native competitors threaten pricing power and growth.

Uncertainty about how quickly companies can adapt and which will emerge as winners adds volatility to valuations and puts pressure on certain areas of the tech sector.

Fink said, “What is certain is that AI will generate enormous economic value. The key challenge and opportunity lie in how to involve more people in this growth.”

He urged clients to stay invested amid ongoing market volatility. “In the long run, staying invested is far more important than timing the market. Over the past twenty years, every dollar invested in the S&P 500 has grown more than eightfold.”

In recent weeks, global markets have been volatile due to intertwined geopolitical and macroeconomic shocks, including escalating conflicts between the U.S., Israel, and Iran. This has driven oil prices higher, disrupted key shipping routes, fueled inflation concerns, and shaken investor confidence.

Meanwhile, worries about AI eroding the value of traditional software companies have also put pressure on parts of the tech sector. These concerns are emerging alongside signs of slowing consumer spending and rising fears of an economic slowdown.

Fink summarized, “We are in an era where major events that used to take a decade to unfold are now happening routinely. Examples include globally impactful wars, trillion-dollar companies, restructuring of international trade, and the emergence of major technologies.”

“Some of the strongest trading days in the market often occur amid the most unsettling news. The real risk is that we focus too much on noise and overlook what truly matters.”

On other topics, Fink also highlighted issues of energy affordability. As tech companies and other investors pour hundreds of billions into energy-intensive data centers supporting AI models, the U.S. faces a surge in energy demand. He pointed out that the U.S. must expand energy supply through various means and emphasized that the country has fallen behind other major nations in solar energy development.