AI will likely widen existing wealth gaps, Larry Fink warns in annual letter

The ongoing war didn’t feature much in Larry Fink’s latest annual letter, but what did is AI — unsurprising given the amount of developments in that space since he wrote his last letter, when energy infrastructure and pragmatism took precedence.

Another topic that’s once again absent? ESG and climate — topics that featured prominently in his older letters but not since last year, as the AI infrastructure narrative begins to push them further into the margins and bring the more balanced concept of “energy pragmatism” into focus.

Why Fink’s letter matters: He’s the co-founder of the world’s largest asset manager, with some USD 14 tn. His annual letter to shareholders is now regularly read and scrutinized by the world’s top investors and traders.

So, what about AI? Fink mentions its potential, yes, but also its potential downside. He argues that asset ownership remains the driving line in wealth creation, and that AI risks amplifying that gap unless more people gain access to markets. “Companies with the data, infrastructure, and capital to deploy AI at scale are positioned to benefit disproportionately” from the AI boom, Fink cautions.

And the solution? More investing, Fink says. “When market capitalization rises but ownership remains narrow, prosperity can feel increasingly distant to those on the outside,” he explains.

Financial education is part of it, but so is widening the avenues for participation. Early-stage investing accounts for children is an option and can often lead to wider economic growth further down the line. Better social security systems, tweaked for longer-term investments and wider access to tokenization, are others. His argument? The growth of the individual should come with the growth of a country. “[Y]our future and your nation’s future become linked. You help finance its growth. It helps finance yours,” he writes.

Yes, but: The letter fails to acknowledge that it’s not just the lack of access to capital markets that’s stopping people from investing, but also the lack of access to capital itself, as the Financial Times ’ Simon Mundy writes.

You can read the full letter here, and read what others are saying here: Bloomberg | Reuters | The Wall Street Journal | CNBC.

MARKETS THIS MORNING-

Asian markets were mostly in the red amid a global sell-off as the outlook on the war remains uncertain. South Korea’s Kospi was leading the declines, falling 2.6%, while Japan’s Nikkei was close behind, down 0.9%. Over on Wall Street, indices are set to open in the green after Trump extended his deadline for Iran to secure an agreement overnight.

The values in the table above are listed according to the market position as of 3:30pm IST / 2pm GST.