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BlackRock negotiates with governments on investments to leverage AI
ROME (Reuters) – BlackRock is in talks with several governments about ways to finance critical investments to support artificial intelligence (AI), including boosting energy supplies, the CEO of the world’s biggest asset manager said on Friday.
AI is seen as a major boost to global productivity, but it requires data centers and semiconductor factories that require huge amounts of electricity.
BlackRock CEO Larry Fink spoke remotely at a meeting in Rome of B7 business groups from the Group of Seven (G7) states. The conference preceded next week’s meeting in Italy between finance ministers and central bankers from the most advanced G7 economies.
“These AI data centers will require more energy than anything we could imagine. We in the G7 don’t have enough energy,” Fink said.
“I think this will create a real competitive challenge for countries.”
Data centers are likely to be built where energy supplies are cheapest, increasing the need for state subsidies in areas where energy costs are not competitive, Fink said.
Investments to build data centers and chip factories that support and power AI technologies, which BlackRock estimates are “in the billions of dollars,” require the participation of private investors and could be a huge opportunity for pension funds and insurance companies, Fink said.
Japan said on Tuesday it expects electricity production to increase 35% to 50% by 2050 due to growing demand from semiconductor factories and data centers that support AI.
“We are talking to many governments right now about how we can bring in private capital,” Fink said, adding that G7 states could not afford the costs given the risk of a “fiscal crisis.”
“The deficits we see in the G7 are becoming a burden for my children, your children, our grandchildren.”
(Reporting by Valentina Za, editing by Gavin Jones and Rod Nickel)