Big Banker Larry Fink abandons renewables for AI

The Biggest Banker in the world has flipped

Way back in his 2021, annual CEO letter, Larry Fink, CEO of BlackRock, wrote: “No issue ranks higher than climate change.” It will reshape global capital flows, he said, and declared, “…anyone can see the impact of climate change in the natural disasters in California or Florida.”

Now though, never mind about global extinctions and flash floods. Fink just spoke at the Davos ski club for billionaires and declared that we need “trillions of dollars” of investment for AI. Data centres, he said, are rapidly expanding — one technology company he spoke to said that “its data centres currently use about 5 gigawatts, but by 2030 it expects to need 30 gigawatts.”

But like a true banker, he doesn’t see a backflip, he sees only investment opportunities — the world is short of power he says. (He doesn’t say that this is in large part because BlackRock leaned on companies and countries all over the world to abandon fossil fuels.) Fink helped create the energy shortage that he now calls an investment opportunity. BlackRock is the largest asset manager in the world, controlling $10 trillion dollars in assets, or five times Australia’s GDP. When that much money talks, everyone listens.

Now Larry Fink throws wind and solar under the bus.

He’s matter-of-fact, with a straight face, almost like he never pushed intermittent generators:

Fink: “At the same time, this represents a huge investment opportunity. The world is going to be short of power. And to supply these data centres, you cannot rely solely on intermittent sources like wind and solar. You need dispatchable power, because these data centres cannot simply turn on and off.”

Larry Fink slides the bomb in after 45 mins 30 seconds:

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This man probably did more than any single person to pump up the Great Renewables Bubble that peaked in 2022. He presumably has taken his profits long before this speech — leaving mums and dads and pension funds holding the bag with investments in unreliable, expensive generators.

Transcript of Larry Fink at the WEF:

“AI is fundamentally a large-capitalization business. At the moment, if you look at the S&P 500, the ten largest companies account for about 38% of the index. If AI develops the way many expect, and if you look at the scale of reinvestment these companies are already making, that share could rise to 50%. We may end up with an “S&P 10” and an “S&P 490.” That alone shows the power of what is coming.

To properly build out AI, we are talking about trillions of dollars of investment. Data centres today might consume around 200 megawatts, but new facilities are being planned at the scale of one gigawatt — that is the amount of power used by a city. One technology company I spoke with last week said that its data centres currently use about 5 gigawatts, but by 2030 it expects to need 30 gigawatts.

The amount of power required to run AI will have a huge impact on society. Where is that electricity going to come from? Are we going to take it from the existing grid?

What does this mean for energy prices for everyone else? These are major societal questions that we have not really addressed. Forget the uses of AI for a moment — just generating the power to run it requires enormous amounts of energy.

At the same time, this represents a huge investment opportunity. The world is going to be short of power. And to supply these data centres, you cannot rely solely on intermittent sources like wind and solar. You need dispatchable power, because these data centres cannot simply turn on and off.

This article originally appeared at JoNova