BlackRock CEO Larry Fink has warned that halting data centre construction in the US could trigger a recession, arguing that the rapid expansion of artificial intelligence infrastructure has become an important driver of economic activity.

“If we have a moratorium of some sort in this country, we will be in a recession,” Fink told CNBC on Wednesday, October 14, after the investment management firm reported better-than-expected third-quarter earnings.

Fink was referring to the large capital investments being made to build data centres and supporting infrastructure required to develop and deploy AI technologies.

“So much of our economy is based on the buildout of this capex,” he said, referring to capital expenditure.

His comments come amid growing opposition to new data centre projects in several US communities, where residents have raised concerns about rising electricity bills, water consumption, environmental effects and a lack of transparency surrounding the investments.

The issue has also emerged as a political flashpoint ahead of the US midterm elections scheduled for November 3.

Fink acknowledged the concerns but argued that much of the opposition was driven by inaccurate information. He maintained that data centres were generating employment and supporting economic activity across several industries.

“Data centers are not the problem. They’re creating more new jobs than ever before,” he said.

The construction boom has increased demand for construction workers, computing hardware and other digital infrastructure, as well as investments in power generation and electricity grid capacity needed to supply energy-intensive facilities.

The scale of spending on AI infrastructure has also become a major focus for financial markets.

Source link