AI's Biggest Challenge Is Power, Not Chips: BlackRock CEO Larry Fink

He said the United States has adequate energy resources, particularly natural gas, but lacks the transmission infrastructure needed to distribute electricity efficiently.

"We have plenty of power through natural gas, but we can't distribute it in a proper way," he said, adding that the country would need to invest "hundreds of billions of dollars" in expanding and upgrading its electricity grid.

"And if we don't do that, we are not going to succeed in A.I.," he said. "A.I. is just a bunch of electrons. So you need the power to create the electrons."

Fink argued that demand for AI computing capacity currently exceeds supply, driving shortages not only in advanced chips but also in electricity and other critical infrastructure.

"At this moment, there's more demand than supply," he said. "We have shortages of compute right now which to me is the biggest problem we have in this country today."

He warned that unless computing costs fall significantly, smaller organisations could struggle to benefit from the AI revolution.

"I'm not worried about BlackRock or J.P. Morgan having the money to invest in these models," Fink said. "But I am very worried about municipalities or hospitals. Are they going to invest in this?"

Calling for wider access to AI technologies, he said the United States must "democratise A.I." so that hospitals, local governments, transport systems and small businesses can also deploy advanced AI tools.

"If we can't do that, then we're going to have some real structural issues," he said.

Fink also dismissed concerns that equity markets are in a speculative bubble despite massive investment in artificial intelligence. Instead, he said unusually strong demand had created shortages that allowed some companies to command significantly higher prices for their products.

Discussing the broader economy, Fink said recent geopolitical shocks, including the conflict involving Iran, demonstrated the resilience of the global economic system.

"The global economy actually mitigated much of the stresses," he said, pointing to increased energy production, diversification of supply and technological adaptation. "We solve problems."

On the US fiscal outlook, Fink argued that sustained economic growth offered the best path to managing rising government debt.

"If we cannot grow the economy by three per cent a year, we're in trouble," he said, urging policymakers to encourage private investment and streamline infrastructure approvals rather than relying on higher taxes.