The rise of artificial intelligence risks widening inequality, and only a handful of companies and investors are likely to reap its financial rewards, BlackRock Chief Executive Larry Fink has said.
The head of the $14 trillion asset manager used his annual letter to investors on Monday to highlight the potential dangers around the exponential growth of AI, which has attracted rapid investment and has become, he said, “central to strategic competition” between global powers like the United States and China.
“The enormous wealth created over the past few generations flowed primarily to people who already owned financial assets,” Fink said. “And now AI threatens to repeat that pattern on an even larger scale.”
He warned that the rise of AI risked accelerating a trend in which leading companies were taking the lead while others struggled to keep pace.
AI-focused tech stocks have seen significant gains in recent years: The market leader, chipmaker Nvidia, is now valued at $4.3 trillion.
Fink said companies with the data, infrastructure and funding to deploy AI at scale “are positioned to benefit disproportionately.” That could end up exacerbating the gap between rich and poor, he said.
“History suggests that transformative technologies create enormous value, and much of that value lies with the companies that build and deploy them, and the investors who own them,” Fink said.
“That’s not unusual and none of this is inherently problematic,” he added, noting that the winds had often shifted with technological change.
However, “the broader question is who shares in the profits,” Fink cautioned. “When market capitalization increases but ownership remains limited, prosperity can seem increasingly distant to those on the outside.”
Fink’s comments come weeks before BlackRock is expected to reveal his salary for 2025. He was given $30.8 million the previous year, raising concerns among some shareholders, and only 67% approved of the eye-popping package last spring.
“One thing is clear,” Fink added in his letter. “AI will create significant economic value. Ensuring that participation in that growth expands along with it is both the challenge and the opportunity.”
However, there is also growing concern about an AI investment bubble, with some experts warning that the industry’s rapid growth reflects the conditions that led to the dot-com crash.
In October, the Bank of England warned there were growing risks of a “sudden correction” in global markets linked to rising valuations of leading AI technology companies.
There has been increased scrutiny of several multibillion-dollar deals, including circular investments between leading artificial intelligence companies. This includes cases where Nvidia invested in a company that then bought Nvidia chips, raising some fears that the AI industry is in a riskier situation than its backers are willing to admit.
Fink stopped short of offering a direct solution to AI’s impact on inequality, but urged more people to start investing in stocks instead of focusing on home ownership to build wealth.
The BlackRock boss said rising housing costs and tighter lending standards had made it harder to own a home, while taxes, insurance and maintenance resulted in lower returns for those who managed to get on the housing ladder.
“It’s hard not to empathize with people facing this,” Fink said. “If you no longer believe your job is a path to success, you believe you can’t afford a house, or you believe that even if you could, it won’t create much wealth, then the economy doesn’t seem like it’s working for you. No country can prosper if that’s how its citizens feel.”
Instead, the head of the asset manager, which charges a fee to help people invest, said people should turn to financial markets to grow their wealth.
“If more and more prosperity is being created in the capital markets, part of the answer is to ensure that more people invest in them,” he said.
“That doesn’t diminish the real challenges around housing affordability or the fact that many households’ incomes haven’t kept pace with asset values,” Fink added. “It just means that a key part of the solution is bringing more people into the capital markets, so they can share in the growth that is already happening, and not just watch it from the sidelines.”
