It’s no surprise that the CEO of the world’s largest asset manager wants more people to invest in the capital markets.
Larry Fink, the billionaire CEO of $14 trillion BlackRock, wrote in his annual letter to shareholders that putting money into capital markets, including public stocks and private credit, is the best path to long-term financial security.
But he also makes clear the risks for people who don’t or can’t invest in things like the growth of artificial intelligence.
“The old model of global capitalism is crumbling, with most of the wealth flowing to those who own assets rather than those who worked and earned most of the money,” he wrote.
AI “threatens to repeat that pattern on an even larger scale, concentrating wealth among the companies and investors in a position to capture it,” he added.
As the United States approaches its 250th anniversary, Fink said that greater integration of AI into global industries could accelerate inequality, and widening wealth inequality could jeopardize elected governments.
“Democracy depends on people feeling like they have a real stake in the future of their country,” he wrote.
According to his letter, AI will bring scale and resources to companies. That’s not “inherently problematic,” he writes, but “if ownership remains narrow, prosperity can feel increasingly distant to outsiders.”
Big tech companies like Amazon, Alphabet, Microsoft, and Meta expect to spend hundreds of billions of dollars building the infrastructure to support AI. Investment firms, including BlackRock, are partnering with these companies to fund some of these projects.
Fink highlighted potential solutions to inequality such as tokenizing investment opportunities to make them more accessible to those new to investing, and structural changes to Social Security that allow the program’s capital to function more like a pension fund and grow “in line with the overall economy.”
Fink wrote that he is not calling for privatization of the program, but rather a “long-overdue conversation” about Social Security.
The “civic miracle” of becoming part of a country’s growth through investment is an important link between citizens and government, Fink wrote.
“The challenge before us is to scale it up so that more people can invest in and share in the growth of their countries,” his letter said.