“I am sure we’ll have one or two bankruptcies” among large AI companies, BlackRock CEO Larry Fink told Liz on stage at the company’s infrastructure event in Washington this week. “We’re going to have some huge successes and a couple failures… That’s capitalism!”
When it comes to AI fears, Fink said he’s more worried about the US “losing to China” than capex overspending and recounted a recent conversation with a CEO of an unnamed hyperscaler, who told him: “I may be overinvesting in the short run, but the one thing I can tell you with certainty, I can’t be third.”
The problem is that someone will be third and fourth and fifth, and those stragglers have raised huge amounts of equity and debt that is now oozing through the financial system. Fink said those players have healthy enough margins in their advertising and other businesses to keep shareholders happy. Let’s hope so.