Larry Fink, CEO of investment management firm BlackRock, recently discussed on an earnings call how the company’s AI investments are expected to bolster productivity and elevate wages.
During the call, Fink highlighted that despite increasing assets by $2.5 trillion over the past 18 months, BlackRock has maintained its head count, attributing this achievement to productivity enhancements stemming from technological advancements, including AI.
“We’re going to bring down inflation in America. This is how it’s going to have to be done, driven through technology, which will increase productivity,” Fink remarked. He further emphasized, “What it also means is rising wages. The whole organization is doing more with fewer people as a percentage of the overall organization. That is really our ambition.”
As a $10.5 trillion asset-management giant, BlackRock is actively positioning itself as a key participant in the AI revolution by serving as the capital provider for new data centers and power-generation facilities needed by AI-driven enterprises.
Reflecting on his contemplation of AI’s transformative impact on the firm during a conference last year, Fink stated, “We spend a lot of time with different technologists who know much more about this than I do. They believe things like it will increase productivity by 30%.”
While some economic studies indicate that AI is already enhancing productivity for workers in white-collar roles, the correlation with wage gains is not guaranteed. Increased productivity could lead business owners to retain those additional gains for themselves.
While AI proponents anticipate an economic upswing, there are concerns that it may result in fewer job opportunities and lower wages in certain professions. According to a White House report by the Council of Economic Advisors, twenty percent of Americans hold jobs that are likely to be significantly affected by AI.
The report suggests that while some individuals may benefit from AI through heightened productivity and new job prospects, others may face challenges, predominantly due to job displacement.
