AI to Worsen Wealth Inequality: BlackRock CEO

BlackRock CEO Larry Fink has warned that while most wealth has gone to asset owners, AI could worsen inequality unless more people share in market growth.

Fink pointed out that transformative technologies create enormous value for the companies that build and deploy them, and for the investors who own them. (Photo: Moritz Hager, World Economic Forum Flickr) 

“The old model of global capitalism is fracturing,” Fink wrote in the asset management giant’s annual chairman’s letter to investors, Ines Ferré reported for Yahoo Finance.

He highlighted that while countries are spending enormous sums to become self-reliant in energy, defense, and technology, “the vast majority of wealth has flowed to people who owned assets, not to people who earned most of their money by working.”

He added: “Now AI threatens to repeat that pattern at an even larger scale, concentrating wealth among the companies and investors positioned to capture it. This is where much of today’s economic anxiety comes from: a deeper feeling that capitalism is working—just not for enough people.”

Fink pointed out that transformative technologies create enormous value for the companies that build and deploy them, and for the investors who own them.

He also noted that artificial intelligence is leading to “K-shaped” outcomes, where leading firms pull ahead while others struggle. For example, Walmart recently reached an all-time high valuation about two weeks after luxury retailer Saks filed for bankruptcy.