BlackRock’s chief executive and long-time AI bull Larry Fink has said fears of an AI bubble are misplaced, predicting traders will one day be able to bet on a futures market for computing power.
Speaking on a panel at the Milken Institute Global Conference in Beverly Hills this week, Fink said global demand for computing power is now so huge that traders will one day be able to bet on a futures market for it.
With the US facing shortages of power, compute capacity, chips and memory, he predicted this would create an entirely new asset class for traders.
“I actually believe a new asset class will be buying futures of compute. We just don’t have enough compute power right now,” Fink said.
A futures market is an exchange where futures contracts are traded, derivatives that lock in the future delivery of a commodity or security at a set price. Commodities are typically traded this way, so Fink is suggesting computing power could one day be traded like oil.
Rather than an AI valuation bubble, he argued the real concern is the opposite, with demand outstripping supply.
“There is no AI bubble,” Fink said. “There is the opposite. We have supply shortages. Demand is growing much faster than anyone has ever anticipated.”
BlackRock has long been bullish on AI, reiterating that view again this week in its Weekly Market Commentary, citing the current US earnings season as evidence to support its thesis.
Earnings are already revealing early winners and losers in the AI race, which shows no signs of slowing as the US hyperscalers from Google to Microsoft are now projected to spend a combined US$700 billion on the AI buildout this year alone.
Google’s results stood out in particular, with its cloud unit – now the fastest-growing of its kind – surging more than 60 per cent year-on-year. Its enterprise backlog nearly doubled in a single quarter to almost US$500 billion.
As reported by Bloomberg, BlackRock itself is investing tens of billions of dollars in data centres through a partnership with Microsoft, Nvidia and MGX, an investment vehicle in the UAE, among others.
Last year, BlackRock-owned Global Infrastructure Partners (GIP) announced it had agreed to acquire Aligned Data Centres for about US$40 billion. Earlier this year, GIP and private equity firm EQT also agreed to acquire AES Corp, one of the US’ largest listed utilities, for US$10.7 billion in cash as the company positioned itself for soaring electricity demand.
Also on the same panel as Fink, Brookfield Asset Management CEO Bruce Flatt said the global economy is being “rewired” around data centres, cloud computing and AI.
In a recent note on AI earnings, Nuveen managing director and head of macro credit and global investment strategist Laura Cooper also highlighted the broader “second-order effects” of AI beyond big tech, including rising demand for inputs such as power.
“Notably, the rally was not confined to tech: industrials, utilities, and healthcare outperformed, a sign that markets are beginning to price the second-order effects of the AI buildout: power demand, grid investment, and physical infrastructure,” Cooper said.
For investors, she said the focus should be on select exposures already delivering results, while also highlighting opportunities in geographic diversification beyond the US, including Europe, Japan and emerging markets.
