Founder, Chief Executive Officer & Chairman, BlackRock Inc
BlackRock CEO Larry Fink: I'm very bullish on the markets over the next 12 months
BlackRock Chairman and CEO Larry Fink joins 'Squawk on the Street' to discuss the company's quarterly earnings results, latest market trends, impact of AI and technological advancements, benefits of long-term investing, and more.
About Laurence Fink
In a July 2026 interview, Fink stated he is "very bullish on the markets over the next 12 months," citing a technological revolution that he said would power better margins for more companies. He expressed concern that the high cost of compute could prevent small and medium businesses from benefiting from AI, and said he asks hyperscaler companies how quickly they can bring down that cost. Fink also noted that BlackRock's headcount was unchanged while assets under management had increased by a trillion dollars, attributing this to the use of technology to process more trades and activities. In a 2021 conference, Fink argued that the world needs to "reimagine the IMF and the World Bank" to address climate change and help the emerging world, stating that an estimated one trillion dollars a year is needed for the emerging world's transition to sustainability, while only about 150 billion dollars is currently flowing there. He said that rising energy costs and inflation are being "created by environmentalism" because supply is changing without a corresponding change in demand, and noted that 2021 was seeing one of the largest increases in hydrocarbon demand. Fink also stated that "the world does not need another unicorn food delivery service" and called for investments in technologies to bring down the cost of green alternatives.
Transcript (15 segments)
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Laurence Fink0:00
I believe the role of financing infrastructure around technology, whether it's financing data centers or financing the purchase of chips, as I said earlier, I think we're going to have markets in investing in compute. We're going to have a futures market in this. This is going to be the next revolution in finance. And it happens because of the strength of the United States capital markets having the ability to finance these new technologies. So the United States and other places in the world can be leaders in the new technologies.
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David0:36
You know, you mentioned 50 years. So I am curious. I mean, have you ever seen anything quite like this, Larry? We've got what were the most profitable companies the world has ever seen making a choice to incinerate – wrong word – to decide not to have any free cash flow anymore, to not return capital to shareholders because they have to be part of this headlong race to make sure they are not left behind in the AI future. When I listen to myself say that, you do, there's some worrisome aspects to that, are there not? I mean, I've spoken to some of the leaders this week and last week in that sector. Their biggest worry right now: supply is not keeping up with demand. As you can see, that showing up in the value of the memory stocks. Okay, we have more demand for memory than we have supply. Obviously they've been able to do big price increases. I don't know how sustainable that is. Maybe in three or four years we'll have enough supply, but, you know, and so what we see as a big investor in data centers: the demand for compute is not slowing down, it's growing faster. The problem we have as a country: we're not investing fast enough. So I have an opposite.
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Laurence Fink1:54
So you're saying we're just not even – we need to do even more. I mean, a trillion dollar capex spend from six companies not enough? I believe it's well not just there. We're not investing our grids fast enough. We do not have enough adequate supply of power. And that's what's creating some of the issues at certain state levels that they're worried about electricity prices for the consumer, which is a legitimate issue. But other states that have more power and more capability of delivering power – and delivering power that is not going to raise the price to the consumer – are going to be the big winners for growth. Yeah. So, in the last quarter, we contracted close to 1 gigawatt of power in Pennsylvania. Okay. We're financing another big data center in another state. And in my conversation with every hyperscaler, demand is exceeding supply. And yes, you're right. These large companies used to be balance sheet light, and now their business has changed. And that is with – but that's the role of the capital markets. And I promise you these are going to be great investments for individuals if we could if...
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David3:10
But you've got to know that the underlying business model ultimately that we get to is going to generate enough revenue and profit to be able to pay for all the data centers. They're not cheap.
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Laurence Fink3:21
Yeah. They're 50, 60 billion dollars for one gigawatt. What I worry about, Dave, is not the demand side. I worry about: can all of society benefit from AI because right now compute is so expensive. My questions to everybody in the hyperscaler business is not whether they have enough demand, it is how quickly can they bring down the cost of compute. I'm not worried about BlackRock paying for the AI. And I think we've been a huge investor in it, and our systematic equity team has really benefited with the flows and the return. But I worry about the small and medium businesses: how are they going to be able to compete in this new AI technology world. So the biggest question I ask behind the scenes is how quickly can we bring down the cost of compute. And okay, they tell me it's like Moore's law and how quickly they can develop faster and faster analytics to have faster compute. But unless we develop better technology and better systems in our grid to provide more power, more consistent power, I believe the United States must be power agnostic. We should not care if it comes from solar or hydrocarbons. We have to be there. But we need to be manufacturing the solar panels in the United States, building the battery storage. At least we can do the battery storage here.
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David4:50
We do.
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Laurence Fink4:51
So those are my worries. My worry is not about a bubble. My worry is we don't have the ability to build fast enough. And then I go watch China.
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David5:00
China's building 100 gigawatts of nuclear. They're building close to 100 gigawatts of solar. Okay. They are getting set up for this AI revolution and the need for power. We're not doing this enough. And I actually get frightened when I see states saying we're going to do a moratorium. That's not the answer. The answer is how do we deliver more power quickly? Let's, why don't we all start? Because again, how do we deliver more power so we don't raise electricity prices but we can be the center of the AI revolution.
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Laurence Fink5:32
No.
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David5:33
Can I ask you about leverage? Every morning we come in here, we check the Kospi, which was up 6% to 9% swings. The South Korean president said the market there she thinks is quite unstable. A lot of its leveraged ETFs and two big names,
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Laurence Fink5:49
Which we don't really do.
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David5:50
Right, right. Do you worry about that though? Is it a global risk factor?
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Laurence Fink5:53
No, I really don't worry about that. There's not that much leverage in the system compared to 2008, 2009. Now, maybe the Korean market has that embedded leverage in it. There is no question, as I said in earlier times and over here, I was always worried about the leverage in Bitcoin and crypto. There was too much leverage players in it. That's why we had the washout, and I think there's more stability at these levels here. But no, we don't see that much implicit leverage for the scale of the capital markets today. The leverage is not as large. I mean, that doesn't mean there are not pockets. But no, as I said in my prepared remarks this morning, I'm very bullish on the markets over the next 12 months. I think the technological revolution is going to power better margins for more companies. I mean, think about BlackRock: we've raised our margins, increased by 260 basis points over the last 12 months. A lot of it is using more and more technology.
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David6:55
Can you keep those margins going? You said you don't see 45% to 46% margins as a ceiling. You pointed back to 2021. Your business though is very different than it was in 2021. So I'm sort of curious: what's the mechanism that gets you back above 47%?
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Laurence Fink7:10
Continuing to drive more growth in our private markets area, which we see incredible momentum. Continue to drive opportunities in retirement, which I believe these are all going to be creating better margins. And just making sure that we're utilizing technology as fast as we can to do more with less. I mean, our headcount, David, is unchanged, and we're up a trillion dollars in assets. Okay, that's what you're seeing. We're able to use technology to process more trades, to process more activities. So we're able to do that. We're able to leverage our human capital using technology working alongside of that. We're using the amount of code we're writing alongside our coders with AI, which has accelerated dramatically. So we're able to do more and more. And as the ability of AI and compute, as I talked about earlier, becomes faster and cheaper, that will drive even higher margins for not just BlackRock but for other firms.