In early May, BlackRock (NYSE: BLK) CEO Larry Fink made a case against the existence of an artificial intelligence (AI) bubble while proposing the creation of a new asset class to address infrastructure constraints.
Specifically, the billionaire identified a series of shortages the U.S. is facing, highlighting that there is a significant deficit of energy and computing power relative to the alleged and expected AI-driven demand.
Fink speculated that buying futures of compute could prove a new asset class in the near future.
“We’re short power, we’re short compute, we’re short chips,” Fink said before adding, “I actually believe a new asset class will be buying futures of compute,’ and concluding that “There is not an AI bubble. There is the opposite.”
According to BlackRock’s CEO, a development like that could help technology companies against potential price shocks later down the line, akin to the derivatives mechanisms that exist for commodities like wheat, oil, and electricity.
Could futures resolve AI supply constraints?
Physical limitations have been increasingly highlighted through recent earnings reports and other publications, but also through the practices some data center operators have employed to secure power.
For example, Caterpillar (NYSE: CAT) has enjoyed explosive stock market growth with its energy division recording a rapid rise as firms like xAI started using diesel generators to keep their facilities operational.
Additionally, Google (NASDAQ: GOOGL) recently highlighted that its cloud revenue could have theoretically gone higher thanks to AI-driven demand, but that capacity constraints limited the actual results.
Lastly, the creation of a new asset class that could help in ensuring more stability could offset risks that emerged from the delays in actual data center construction by providing an additional hedge.
Simultaneously, however, there is a degree of uncertainty, given the relatively short shelf life of advanced computer hardware, while gaps in reporting – especially when paired with surveys indicating adoption of AI has limited to no benefits – call into question the veracity of claims regarding skyrocketing demand.
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