BlackRock Larry Fink: The AI wave is driving up energy costs, and China is developing a 100 GW nuclear power program to surpass the United States

Larry Fink, CEO of asset management giant BlackRock (BlackRock), said in an interview on 3/11 that inflation pressures have risen due to labor shortages in traditional agriculture and construction industries, and suggested that the US government attract private capital to invest in infrastructure to promote economic growth. As for the wave of AI, Fink pointed out that AI has brought many changes to the labor market and defense, and because AI data centers consume extremely high power, which in turn leads to increased energy demand, and the government must balance traditional and renewable energy.

Inflation, labor shortages and the national debt are the biggest challenges to the U.S. economy

Fink said inflationary pressures will rise in the short term due to labor shortages in agriculture and construction. He said:

70% of U.S. agricultural workers and 40% of construction workers are overseas migrants, and a lack of sufficient labor will affect agricultural harvests and infrastructure.

AI and robots will bring long-term "technological deflation", but in the short term, specific occupations such as plumbers and construction workers are still in short supply, resulting in higher wage costs.

In addition, Fink also expressed his views on the US debt issue:

The U.S. debt was only $8 trillion in 2000, and today it has reached $36 trillion, and it is still increasing.

Interest spending has exceeded the defense budget, threatening to affect the stability of the dollar, leading to higher interest rates and a recession.

It is recommended that the government reduce regulatory barriers and attract private capital to invest in infrastructure to promote economic growth.

AI will reshuffle the workforce, and pragmatic energy policies will respond to the high energy-consuming demand of AI

Fink says businesses and governments need to work together to:

AI and robotics will displace a lot of the workforce, and the mobile phone manufacturing industry is expected to lose 30% of its workforce in the next two years.

Drones and AI automated weapons change the mode of warfare in the Ukrainian-Russian war and the conflict in the Middle East, requiring more technical expertise to operate AI war tools.

On energy policy, Fink asked the government to strike a balance between traditional and renewable energy:

The energy transition will drive up costs, assuming that the government pushes renewable energy too quickly, which may lead to rising inflation.

At present, AI data center energy consumption accounts for 2% of the total electricity in the United States, which may increase to 8~12% in 2030, while natural gas, coal, and nuclear energy are still the main energy supplies.

China plans to add 100 GW of nuclear power this year and aims to be fully electrified within five years.

The return on investment in ports is up to 16%, and it is not afraid of tariff trade wars

BlackRock recently announced the acquisition of 44 ports, including 2 ports in the Panama Canal and 6 ports in the Suez Canal, Fink said: "Even if the tariff war continues, global trade volume will still grow steadily by 2 to 3%, and the acquisition of a globally strategic port in the Panama Canal is the right choice, and the return on investment in ports can reach 15 to 16%."

As global economic and technological changes accelerate, businesses and governments should work together to respond

In summary, Fink said that the world will be affected by AI, automation, the energy transition and fiscal policy, and that companies and governments should:

Be pragmatic in the face of inflation and changes in energy demand.

Respond to AI labor market reforms and ensure adequate social safety nets.

Contribute to economic growth through private capital investment in infrastructure.

Strengthen retirement investment and financial education.

( 198 million people in the United States will be unproductive? Bridgewater Dalio: AI brings a 12 trillion magnesium labor revolution, and the gap between the rich and the poor and the AI bubble are )

This article by BlackRock Larry Fink: The AI wave drives up energy costs, and China's development of a 100 GW nuclear power program to surpass the United States first appeared in Chain News ABMedia.