Elon Musk May See An Existential Threat, But BlackRock's Larry Fink Says AI Can Bring Down Inflation

BlackRock Inc BLK CEO Larry Fink reportedly said artificial intelligence has great potential to increase productivity and can ultimately be the technology that can control price rises.

Attributing the collapse of productivity as a major reason for sticky inflation, Fink said at the BlackRock Investor Day on Wednesday that AI "may be the technology that can bring down the inflation," according to a Bloomberg report.

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Fink holds the view that AI could have some very large outcomes for long-term investing and may help transform margins across sectors. With AI, BlackRock will have the "same healthy paranoia, the same healthy enthusiasm," that it brings to its other businesses, said the CEO of the world's largest asset manager.

The recent rally in the markets has been largely led by AI-driven optimism. While the Nasdaq Composite has rallied over 31% since the beginning of 2023, the S&P 500 gained over 14% during the period, according to Benzinga Pro. Stocks like NVIDIA Corporation NVDA, Advanced Micro Devices, Inc. AMD, Taiwan Semiconductor Mfg. Co. Ltd. TSM and Microsoft Corp MSFT have registered significant gains since the start of 2023.

However, many notable experts have sounded out warnings regarding AI. For instance, Elon Musk and Steve Wozniak are among the 1000+ signatories who have signed an "open letter" calling for a pause on training systems exceeding OpenAI's GPT-4. The letter calls on "all AI labs to immediately pause for at least 6 months the training of AI systems more powerful than GPT-4" until safety protocols for such designs are created, executed and evaluated by independent experts. 

Musk, on Tuesday, also raised a question on Twitter asking Marc Andreessen, "How many years do we have before AI kills us all?"

BlackRock's Vision: BlackRock intends to double its private markets revenue over the next five years to nearly $2 billion versus $1 billion in 2022, the report said. Revenue from private markets, including infrastructure, private equity, real estate and private credit, had already more than doubled since 2018, it stated.

Fink, who is 70, told investors he doesn't see himself retiring in the near future. "I'm not planning to leave BlackRock any time soon," he said. "…but BlackRock's board and I have no higher priority than developing the next generation of leaders," Fink added.

BlackRock managed $9.1 trillion in client assets at the end of March, and had net inflows of $110 billion in the first quarter, according to the report.

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