Investment firm BlackRock held its midyear outlook meeting on Tuesday. During the meeting, they discussed recent economic and technological trends, such as artificial intelligence (AI) reshaping the world, which they suggested was on par with the Industrial Revolution.
"We believe we have entered a very different regime," said BlackRock head Jean Boivin, "The exact date is not necessarily determined, but certainly post-2020. For various reasons, we believe this environment is different from the decades that have preceded 2020."
Boivin said this transformation did not come from "growth, inflation, or central banks," but instead "is really about the potential for a fundamental reshaping of the structure of the economy that we think is happening."
"AI is one piece of that. The energy transition and evolution is another key part of that. We also think of the globalization that is being rewired as another piece that is going to be more directly linked to this immediate transformation," Boivin continued, saying that this new era could come much faster than the Industrial Revolution, which lasted approximately a century, or even other significant periods which lasted around 50 years.
Global Chief Investment Strategist Wei Li expanded upon the concept, suggesting, "We are talking about transitioning from the financial economy to the real economy."
While this may seem backward, given that the real economy focuses on tangible goods and services and the financial economy moves the necessary money around, Li explained that "If we look at the growth of [the] AI data center, it is expected to increase on an annual basis somewhere between 60 and 80%. In the coming years, if we look at the investment of the low-carbon transition days needed, we are talking about it potentially getting into $3.5 trillion annually by the end of the decade."
"And when we add up all of these, we get numbers that are really very rarely seen in history, comparable to the Industrial Revolution and comparable to the Information and Technological Revolution of recent decades as well," Li continued.
In other words, now is a good time to invest.
