BlackRock’s chief executive Larry Fink has doubled down on the importance of data-center building to the health of the U.S. economy, saying not pushing ahead could be inflationary. It means we’re not going to build these. It means we’re building elsewhere,” he said, noting that Canada, India or Abu Dhabi could become alternatives.
And the faster we can build up more data centers, the more compute we have, the faster we can bring down the cost,” he said on Wednesday. Don’t Short Yourself offers weekly money tips to help you earn it, stack it and grow it. I would like to receive updates and special offers from Dow Jones and affiliates.
I can unsubscribe at any time. Hyperscalers in the U.S. alone are talking about $7 trillion to $9 trillion that’s needed to finance that building and keep the U.S. in a leading position on AI, he said. That type of funding, on top of financing for the federal deficit, is pushing up the term premium — the extra return demanded by investors to hold longer-term Treasurys — which is bound to just keep rising, he said.
Treasury has climbed nearly a full percentage point this year, closing Tuesday at 5.12%. There has been increasing opposition to data centers by U.S. communities. An August survey by the University of Pennsylvania’s Annenberg Public Policy Center showed 61% of Americans are somewhat or strongly opposed to building new data centers where they live, versus 49% about four months earlier.
Recent data from Heatmap Pro showed at least $260 billion in data-center cancellations in the U.S. this year so far due to local opposition. **Read:**The data-center backlash is so fierce that Republican candidates are willing to cross Trump Fink blamed fear of data-center building on “misinformation,” saying that tech companies and builders need to work better with communities and not use all the resources such as water. Turning to markets, Fink urged investors to not get overly focused on daily volatility, pointing out that an investor putting money in the S&P 500 over the past 25 years and letting it sit would have earned an 11% compounded return. If you were out of the market for the top 40 days, out of 6,300 days, you had a negative return,” he said.
The S&P 500 , dominated by big tech players, is up 12.6% this year, but the equal-weight S&P 500 is returning the same, as investors have rotated out of tech in recent months on worries about whether AI investment will pay off.
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