BlackRock CEO Larry Fink revealed on Friday that the asset management giant is engaging in discussions with various governments to explore ways to finance critical investments aimed at supporting artificial intelligence (AI) initiatives, particularly in bolstering power supply infrastructure.

Speaking remotely at a meeting of the B7 business groups in Rome, which precedes the gathering of finance ministers and central bankers from the G7 advanced economies next week, Fink emphasized the monumental power requirements of AI-related facilities such as data centers and semiconductor plants.

According to Fink, the anticipated surge in demand for power from these AI data centers poses a significant challenge for G7 nations, as existing power infrastructures may not be sufficient to meet the burgeoning needs. He underscored the necessity for strategic investments in power generation to support the burgeoning AI ecosystem, cautioning that failure to do so could result in a competitive disadvantage for countries.

Fink highlighted the pivotal role of private investors in financing these infrastructure projects, estimating the required investments to be in the trillions of dollars. He emphasized the potential for pension funds and insurers to play a significant role in funding these initiatives, thereby aligning long-term investment objectives with the development of AI infrastructure.

The CEO pointed out that data centers and chip factories are likely to be located where energy costs are lower, suggesting the need for state subsidies to incentivize investment in regions where energy costs are less competitive.

Fink’s remarks come in the wake of Japan’s announcement that it anticipates a substantial increase in electricity demand by 2050, driven by the proliferation of semiconductor plants and data centers supporting AI technologies.

In essence, Fink’s comments underscore the imperative for collaborative efforts between governments and private investors to address the infrastructure challenges associated with AI development, ensuring sustainable growth and competitiveness in the global AI landscape.