BlackRock CEO Larry Fink says a data center moratorium could trigger a recession, because much of the economy rests on AI infrastructure spending. His warning comes as local opposition to data center construction becomes a campaign issue ahead of the Nov. 3 midterm elections.
BlackRock CEO Larry Fink warned that a halt to data center construction could trigger an economic slowdown. He made the case on CNBC on Wednesday, after BlackRock reported better-than-expected third-quarter earnings. BlackRock shares advanced about 1% in late morning trading.
Fink ties the economy to AI capex
Fink told CNBC that a moratorium of some sort would put the country in a recession. He pointed to the scale of AI spending. According to Fink: "So much of our economy is based on the buildout of this capex", he added.
Wall Street analysts estimate total AI capital expenditures could climb above $1 trillion in 2027 and exceed $5 trillion by 2030.
Opposition grows in the states
However, strong local opposition to data center construction has emerged as a key issue in the Nov. 3 midterm elections. Communities cite rising utility costs, water use and environmental damage. Fink acknowledged fears about the buildout but said most of it is on misinformation.
Crypto Briefing reports that New York enacted a one-year moratorium on environmental permits for data centers drawing 50 MW or more. The same outlet says approximately 100 localities across the US have proposed or enacted data center moratoriums.
Jobs and power grid investment
Fink argued that data centers create more new jobs than ever before. The investment drives demand for construction workers, digital infrastructure, AI compute hardware and energy infrastructure to secure grid power, he said.
Per Crypto Briefing, Fink estimates the US needs between $7-9 trillion in investment in power grid and security infrastructure over the coming years. The outlet adds that BlackRock holds an 80% stake in a Texas data center project backed by Meta.
Sources: CNBC, Crypto Briefing
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