By Manya Saini
March 23 (Reuters) – Asset management giant BlackRock’s CEO Larry Fink warned on Monday the artificial intelligence boom risks widening the wealth gap unless more individuals share in market gains.
The rapid rise of AI has sparked debate over whether its gains will be broadly shared across sectors or increase the divide between big tech firms and smaller companies that may struggle to compete.
Since the launch of ChatGPT in November 2022, much of Wall Street’s AI-driven market gains have been led by companies at the center of the boom, pointing to a more narrow set of winners.
“The massive wealth created over the past several generations flowed mostly to people who already owned financial assets,” Fink said in his annual letter to shareholders. “Now AI threatens to repeat that pattern at an even larger scale.”
Although more individuals have entered markets in recent years, participation is still modest, particularly in equities and other traditional assets linked to wealth creation.
Fink, who leads the world’s largest asset manager with about $14 trillion in assets, has used these closely watched letters to highlight the role of capital markets in building wealth and the importance of long-term investing.
“History suggests that transformative technologies create enormous value – and much of that value accrues to the companies that build and deploy them, and to the investors who own them.”
‘HERE TO STAY’
Fink said that AI is “here to stay” and remains central to strategic competition between the United States and China.
“The U.S. clearly sees that AI leadership is not optional, and that it will require sustained investment – in research, infrastructure, talent, and the capital markets capable of financing innovation at scale.”
Investors are increasingly wary the fast-growing adoption of AI could disrupt established business models, particularly in legacy software and services, where automation and new AI-native competitors threaten to erode pricing power and growth.
The uncertainty over how quickly companies can adapt, and which firms will emerge as winners, has added volatility to valuations and weighed on parts of the tech sector.
“One thing is clear: AI will create significant economic value. Ensuring that participation in that growth expands alongside it is both the challenge and the opportunity,” he said.
STAYING INVESTED
Fink urged clients to stay invested despite ongoing market volatility.
“Over time, staying invested has mattered far more than getting the timing right. Over the past two decades, every dollar invested in the S&P 500 grew more than eightfold,” he added.
Global markets have been roiled in recent weeks by a confluence of geopolitical and macroeconomic shocks, including the escalating U.S.-Israeli conflict with Iran, which has driven sharp spikes in oil prices and disrupted key shipping routes, stoking inflation fears and rattling investor sentiment.
At the same time, growing concerns that AI could erode the value of legacy software businesses have weighed on parts of the tech sector. These pressures are unfolding alongside signs of softening consumer spending and rising worries about an economic slowdown amid still-elevated interest rates.
“We are living through a period where things that would’ve defined a decade have become routine: wars with global repercussions, trillion-dollar companies, a fundamental reordering of international trade, and the advent of the most significant technology since, at least, the computer,” Fink said.
“Some of the market’s strongest days came amid the most unsettling headlines. The danger is that we focus so much on the noise that we forget what actually matters.”
(Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)
