BlackRock at RBC Conference: Technology and Growth Insights

On Tuesday, 04 March 2025, BlackRock (NYSE: BLK) participated in the RBC Capital Markets Global Financial Institutions Conference 2025. Chairman and CEO Larry Fink shared a strategic overview of the global economic landscape, highlighting the potential of new technologies and the challenges posed by inflation and market volatility. While optimistic about long-term growth, Fink acknowledged the short-term hurdles facing the global economy.

Key Takeaways

• BlackRock raised $641 billion in new flows last year, with significant contributions from its quantitative equity platform.
• The firm expects short-term volatility in 2025 but remains bullish on long-term economic growth driven by technology.
• BlackRock is expanding its presence in private markets and has made several strategic acquisitions.
• Fink sees Europe as poised for growth, with increased focus on economic development and innovation.
• Generative AI is expected to revolutionize various sectors, despite the challenges of cost and democratization.

Financial Results

• BlackRock raised $641 billion in new flows last year.
• The quantitative equity platform alone saw approximately $26 billion in net inflows.
• The company reported a margin increase of about five points due to investments in technology.
• BlackRock’s assets under management grew from approximately $7 trillion in 2019 to around $11.6-$11.8 trillion today.

Operational Updates

• BlackRock acquired Prequent, a major data source for private markets.
• The firm completed the acquisition of GIP in infrastructure and expects to close the acquisition of HBS in private credit by mid-2025.
• An AI data center fund was announced in collaboration with MGX of Abu Dhabi, Microsoft, and NVIDIA.
• BlackRock acquired 43 ports from Hutchison Whampoa for $22 billion.

Future Outlook

• Short-term volatility and inflation are anticipated, but a positive economic trajectory is expected to resume within three to four quarters.
• Technology is seen as a long-term deflationary force.
• Europe is recognized for its renewed focus on growth, offering new investment opportunities.
• There is an expected shortage of electricians due to the construction of data centers.
• Significant job creation is projected in sectors requiring human interaction, such as nursing.

Q&A Highlights

• Fink emphasized the importance of viewing market dips as buying opportunities for long-term investors.
• He predicted a challenging year for markets in 2025 but remained confident in the benefits of holding equities.
• Fink highlighted Europe’s potential for growth, citing increased defense budgets and economic responsibility.
• He credited the strength of American capital markets and the U.S. technological edge for future stock price increases and investment opportunities.

Readers are encouraged to refer to the full transcript for more detailed insights.

Full transcript - RBC Capital Markets Global Financial Institutions Conference 2025:

Unidentified speaker, Speaker: Good afternoon. It’s great to see a packed room. I know it’s clearly very volatile times, but we’re back to the ten year being where it was the lowest since October and probably where it was lower than a year ago. That said, we have an S and P up almost 40% over two years and double digit over the last one year. Clearly very interesting times, a lot going on globally.

And obviously some of you have been following some of the recent deal announcements today, but there’s no better person to obviously hear all from in our next keynote. So I’ll have our CEO, Dave MacKay, obviously on the stage with Larry Fink, Chairman and CEO of BlackRock.

Larry Fink, Chairman and CEO, BlackRock: You should have it.

Dave MacKay, CEO: One of the other?

Larry Fink, Chairman and CEO, BlackRock: I think Okay. They put it on this side. Sorry.

Dave MacKay, CEO: I’m in the middle. Well, good afternoon, everyone. I have distinct pleasure to interview and share the stage with one of the great business leaders in the world. All right, thanks so much for

Larry Fink, Chairman and CEO, BlackRock: spending the time today. Hi, everyone. Good to be here.

Dave MacKay, CEO: Interesting day, lots going on at BlackRock, big announcement we’ll talk about today. And I know the President is very happy about the announcement you made today. And but everyone knows, Larry, I don’t think he needs an introduction. Founded in 1988 to $11,800,000,000,000 plus today, maybe a little market

Larry Fink, Chairman and CEO, BlackRock: direction going on. How does that sound today?

Dave MacKay, CEO: Yada, yada, yada, right? 1988, zero billion dollars to $2,000,000,000 I think when you went public and then $11,800,000,000,000 but you are a convener globally. And if you go to Davos like I do and I see Larry at Davos. Larry convenes the world in Davos and your dinner at Davos is one of the most sought after dinners and it’s always one of the most informative of politicians, business leaders from around the world want to be there. And I think that’s kind of the insights that you bring to your customers, your investors to the success you’ve had, you’re convenient in the world, you know what’s going on.

So we’re incredibly privileged to have you kind of share your thoughts today in a world where there’s a lot happening and a lot that you keep track of. So thanks again for being here. So let’s just kick it right off and go to the macro. And we were in Davos, it felt good for part of the world, didn’t feel good for others. So let’s take a quick walk about the world.

And as you look at United States and you look at North America, Mexico, how do you think about the global economy and then some of the impacts of what’s going on in the last twenty four, forty eight hours on tariffs? But kind of general sense, then we’ll move to Europe and we’ll move to Asia.

Larry Fink, Chairman and CEO, BlackRock: Well, first of all, thanks, Dave, and thanks for the partnership.

Dave MacKay, CEO: We do a lot together. We do.

Larry Fink, Chairman and CEO, BlackRock: So, let me just start off and say the world’s fine. I mean, a lot of noise, we’ll get by this. The United States will get by all the, I would say, social tensions between two opposing groups, we’ll get by that. It’s not as bad as it was in the ’60s here in The United States. And I’m tired of having people say, have you ever seen anything like this before?

And the answer is, yes, and we get by it and we move forward. And so I like to just start off and say for long term investors, if there’s a big dip, good, good time to buy. And I truly believe that. I believe we’re getting set up for a big economic boom. A lot of it’s going to be related to new technologies, new science, which will present new opportunities.

But that being said, yes, there’s a lot of noise, a lot of noise now related to the reimagining how global trade is going to be attained and what does that all mean. So, we’re all going to have to rejudge and rethink about how across any specific company or country, but overall the world’s going to be fine. We’re going to find opportunities to grow and all that. In North America specifically, obviously, there’s a lot of tension right now about the world of tariffs and how that’s going to play out. And it’s going to I was talking to a CEO yesterday and she was telling me one side of her business, if all this goes through, is going to be really harmed and another side of her business is going to be really benefited.

But she doesn’t know how that is all going to balance out in her overall company. And it’s one of the large, large companies of The United States. So yes, we’re all going to have to try to think about how we re navigate. I think the trends though we’re going to be net positive in the long run for The United States. And that is because of the role of our capital markets and the role of our technology.

And so we have different governments, we have different orientations, we have reordering of global trade, reordering everything else, but we will find solutions, we move forward. And so there’s yes, there’s no question. The next six months, I think we’re going to have a lot of volatility and volatility is creeping up quite considerably. But I think we’ll find ways to navigate, mitigate and move forward. And so this is going to be a rocky year in 2025, I would say for the markets as we try to get reoriented.

But I think the outcome going up, you’re going to be happy that you’re basically long equities. The one area where I think the market is probably getting it really wrong at the moment is where ten year treasuries are or 20. I see a lot of inflation in the short run. And I think we were talking about it earlier, Dave. Every COI talk to right now is talking about it doesn’t feel as good as it did in the fourth quarter.

The fourth quarter was extraordinarily strong across most companies and we saw that in earnings. There is no question in this quarter and a lot of it is because of reorientation, the restabilization, understanding what’s going on. People are pausing, consumers are pausing, M and A is pausing, corporations are pausing, everybody is pausing and you’re going to start seeing that in the economic results. And the question is, will we start seeing elevated inflation starting in the second quarter when it starts rolling into through the economy? And I had a conversation with one of the large agricultural CEOs in The United States.

And again, they said this is going to show deportations in the short run are going to show up in elevated agricultural prices now. Obviously, the crops are not being put in the ground, maybe we’re seeding right now, but when the crops needed to be picked in The United States, we’re going to have we could conceivably have labor shortages, which is going to elevate food prices. And so all of that’s going to be just a reorientation and ultimately we find ways of fixing it, but in the short run we’re going to have elevated inflation. I think the one thing I think the ten years will be getting it wrong, we’re going to have a steeper yield curve. And so we’ll see how this all plays out.

But I think in the long run, if I think out two years, three years, technology is going to be very deflationary. And I really do believe over a long period of time, we’re going to see some serious deflationary pressures. And if there is ever a trade agreement, generally we have all the chaos first and then we get a lot of trade agreements. And so if you look at the first administration with President Trump,

Dave MacKay, CEO: a lot

Larry Fink, Chairman and CEO, BlackRock: of noise, a lot of issues and then we had trade agreements even with between Canada and The U. S. And Mexico and The U. S. Very good trade agreement.

And yes, and so and could we see could the asymmetric trade be that we’re going to have a trade agreement with China? And that would and so all of these things have to be measured and looked upon. And so, we’ll see this how this plays out. But we expect in the short run volatility, we expect elevated inflation, moderation of the economy in the short run. But over the course of three quarters, four quarters, I think we’re going to be resuming a pretty good trajectory.

Dave MacKay, CEO: Is it fair to say that America doesn’t need more jobs, it needs more

Larry Fink, Chairman and CEO, BlackRock: labor? Yes. I mean, when I started off as a bond trader in the ’70s, we used to say full employment was 6%. Okay, we’re hovering around between 3.84.2%. And in many industries already, we have labor shortages.

And this CEO I talked to in agriculture, if they can’t get the workers. And here’s the interesting statistics, 70% of workers in agriculture who were not born in The United States. They may be citizens now, they may have work visas, they may be all legally here, but we should assume a large percent were not here officially. And 40% of the workers in construction were not born in the same statistic. So when we talk about deportation of millions of people and if that’s the case, many of them are totally integrated into our economy, many of them are not and but many of them are.

And those are some of the issues that I think in the short run we’re going to face. And so we’ll see how this all plays out. But like I said, my couple of asymmetric trades is could all this negativity and noise produce a good positive outcome with a great trading agreement between The U. S. And China.

That doesn’t mean we’re not going to compete in technology and we’re going to have our whole issues there. And I do believe the role of technology is going to reshape the world very rapidly. And right now from our vantage point, most of the technologies new technologies are coming from China or The United States. And so that will remain to be a big tension.

Dave MacKay, CEO: When you read the popular media, one of the challenges I think America is trying to solve for is 40% of the global manufacturing capacities in China. And when you talk about national security interests, that’s a long term problem. Hence, the desire to solve for moving more manufacturing capacity back to America for long term defense industry. So I think that’s part of it.

Larry Fink, Chairman and CEO, BlackRock: Yes. Look, if you look at how technology is re reshaping so many industries, what are if you just pay attention to how war is being fought in Ukraine or how war was fought in Lebanon, it’s a very different style of war. So technology is playing a very large role now and even

Dave MacKay, CEO: in things like that. So,

Larry Fink, Chairman and CEO, BlackRock: and it could be far cheaper. I mean, a drone costs $600 an advanced drone costs $6,000 And so the question is and tank costs millions of dollars and aircraft carriers cost billions of dollars. And so you get to really you start focusing on how technology may be reshaping. I mean, it actually reshapes almost every industry. We’re democratizing warfare.

There as

Dave MacKay, CEO: well. Right. So we arrived in Davos in the third week, second week of January, Phil. And generally to your point, really good about things.

Larry Fink, Chairman and CEO, BlackRock: We

Dave MacKay, CEO: it’s over November, December felt great. All our businesses are doing well. We arrived in Davos on a to feel a real downer among our European friends. Yes. Real downer across the board and a lot of self introspection.

And talk about how you see Europe and what you felt and you talked to so many leaders there and where Europe’s path because this could be a blessing in disguise. And we

Larry Fink, Chairman and CEO, BlackRock: have a new leader in Germany, Former BlackRock Chairman of the BlackRock. You hosted at your dinner. Yes. Let’s be clear, Europe has been in a bad trajectory for ten, twelve years. Europe is so overly regulated.

The difficulties for Europe to move forward has been so present. You talk to CEOs throughout Europe and there is so many of them would like to redomicile to North America, specifically to The U. S. And they just feel really restricted. But it was very clear to me after hearing all the pain from all the different CEOs in January, it was very clear it was a bottom.

I mean, they were so pessimistic and bearish. Once again, you just had it was a great opportunity to go long Europe. And I think what you’re seeing in Europe, especially in the European stock market, what is it up 12% so far this year and complete opposite of The U. S. Market.

So once again, Davos was wrong. It’s always wrong. Everybody

Dave MacKay, CEO: Counter trade.

Larry Fink, Chairman and CEO, BlackRock: Everybody in Davos thought The U. S. Was going to become stronger and stronger and stronger, bearish in Europe, so far that’s a badge. You would follow them, you would have lost a lot of money. Look, I think Europe is now for the first time in twelve years really taking responsibility.

They’re announcing much larger budgets for defense, they’re going to build it there. Europe has a real opportunity to truly start growing again. And maybe Europe can become that economy that entrepreneurs want to work. Over the last twenty odd years, so many entrepreneurs who are creating cutting edge technologies and companies, they ultimately came here. And so let’s see how Europe plays this.

Is this a short term bounce? Obviously, valuations with European equities were just fractions of what the valuation for the equivalent companies in The United States. And they were in some industries, you look at the equivalent company in The U. S. And the equivalent European company, European companies were trading four or five multiple points difference.

And so that converged a little bit in the last thirty days, forty days. But we’ll see how that plays. But I actually am more optimistic in the short run on Europe that you’re seeing the European leaders really taking more responsibility. They’re trying to create growth agendas. Just recently you had President Macron announce a 1.2 gigawatt AI data center.

Prime Minister Maloney announced another AI data center. These are the types of things that would not have talked about a year ago. And so they’re trying to reorient their economies. And so I’m encouraged and that’s why in Davos that the last economic, I guess, session they had, I claimed that I’m constructive in Europe. And because it just felt like the European leadership is now taking responsibility and trying to focus on how do we grow our economy instead of how do we control our economy.

Dave MacKay, CEO: Yes, growth was definitely the paradigm even coming from most senior people, senior leaders within ECB and European Union. And it’s almost out of necessity now, right, with the aging population and the amount of debt they’re carrying, the only out here is through growth

Larry Fink, Chairman and CEO, BlackRock: and therefore needing to Growth in productivity. And if you look at the productivity numbers of Europe versus The U. S, I mean, it’s so Well, the world in The U. S. Almost.

But Europe has really declined their productivity quite a bit over the last ten years. And so if they’re going to be competitive, they’re going to either have to rapidly use AI and robotics to produce more productivity faster or something is going to have to give.

Dave MacKay, CEO: What’s the secret sauce then in The U. S. In such incredible productivity growth, risk taking? Is it a DNA that’s built up over centuries? It’s manifested itself in a differing outcome as far as prosperity, growth, economic power, military power, it’s mind boggling.

Like, what’s the secret sauce? So, I

Larry Fink, Chairman and CEO, BlackRock: would say three things. Because we have we participated in a number of wars, none of the wars were really on our soil. And so when I think about Europe, Europe by having two horrific world wars on their soil has created generations and generation of fear and fear has manifested in higher savings rates than The U. S. Which they thought proudly that was great, but most of that money remained in banks and that was not being utilized in the economy like it could have.

Whereas The United States were criticized for having low saving rates, but we have higher equity participation, higher homeownership. So we were owning assets as a and lot of it has to do that we Americans historically, maybe not in the last five, ten years, but Americans historically are much more hopeful about the future. And I think that is a major component. And I actually believe right now with all the unsettlingness and all these policies may turn out good, they may not, but it’s creating a little less certainty and optimism and I think that’s what’s going on. But I would say and maybe I’m talking my book a little bit, but I truly believe the American capital markets have transcended politics, transcended everything.

And we are benefited as a country beyond any other country that we have an incredibly strong banking system. The law at the same time, the most robust capital markets. So if you’re an entrepreneur with a good idea, you could get capital in The United States, not unlike anywhere else in the world. If you’re a small company today or a medium sized company, you can get capital from a bank, but you have huge opportunities to get back capital from the capital markets. When you think about our housing market, okay, yes, we had a crisis when we went to the extremes in terms of risk.

But the fact that Americans, once they get their mortgage, they know their monthly payments forever. For thirty years. For thirty years. I was in Australia last week. I was trying to think about it last week.

Yes, last no, two weeks ago. And I was struck in our in BlackRock’s office and I think it was in Sydney, not our Melbourne office. I was struck, everybody is watching television there. And I was saying, what’s going on? I mean, is there a big announcement?

Yes, there was an announcement. The Reserve Bank of Australia was lowering interest rates by 25 basis points and there was euphoria. Their mortgage payments went down and it struck me. And when you’re a homeowner and you don’t know what your mortgage payments are going to be throughout the life of that mortgage, That creates more uncertainty. And I now think back about the formation of the mortgage market in The United States.

Americans, once they get there, buy a house and get their mortgage as long as they’re staying in that house, they have confidence that they know their payments. That provides greater hope and that gives you more ability than if you want to buy equities or consume more. And so much of it has to do with the strength of our capital markets, it provided capital beyond any other place in the world. And I truly believe that is one of the great parts of The U. S.

Exceptionalism. Now that being said, I mean, I think The U. S. Has to wake up that our deficits do matter. And this is why I wrote about why we need to start focusing on more public private type of investing, why infrastructure is going to be more important, why we have to start focusing on infrastructure.

If you just use data centers for a minute, right now data centers represent 2% of our electricity utilization. And it’s estimated by the U. S. Government that by February from now it will be 8%. We’re talking hundreds of gigawatts of new power that’s going to be necessary.

Where is it going to come from? How are we going to do it? And the reality is that’s going to be the role of the capital market.

Dave MacKay, CEO: Maybe We’ll sell you some. But

Larry Fink, Chairman and CEO, BlackRock: I thought Canada could be a good source to some of that, but Hydro Quebec will need to build more. I know. And upgrade.

Dave MacKay, CEO: Nuclear, yes, the launch in

Larry Fink, Chairman and CEO, BlackRock: particular. But that does Very fair. Okay.

Dave MacKay, CEO: And that works out there.

Larry Fink, Chairman and CEO, BlackRock: It does throw open the whole idea about nuclear for what role will nuclear play. When you just as a juxtaposition and we’re going to find out who’s right or wrong, right? This year China is building 100 gigawatts of nuclear power this year.

Dave MacKay, CEO: Do you know the basis of coal versus nuclear? It’s almost

Larry Fink, Chairman and CEO, BlackRock: The coal utilization is going down. It’s I mean another juxtaposition of The U. S. And China, we’re moving away from EVs or the narrative is, I would say within five years there will not be an internal combustion engine in China.

Dave MacKay, CEO: It will all be all EVs.

Larry Fink, Chairman and CEO, BlackRock: Probably in towns like Shanghai there is already 40% of the EVs. So we’re going on different paths, but getting back to The United States, it’s just we have huge opportunities to finance anything as long as it’s a good idea. Yes.

Dave MacKay, CEO: Well said. So let’s talk a little bit about BlackRock. So as you think about deploying capital into the world, you said and leveraging the capital markets, you’ve led a very quick and fundamental pivot and how to deploy capital from public markets to private markets and some significant acquisitions, BPI obviously in the news today.

Larry Fink, Chairman and CEO, BlackRock: Yes, the news today. We talked

Dave MacKay, CEO: a little about it as a great success. So can you talk a little about the pivot you’re making, markets changing, alternatives, how you think about investing your clients’ money and the very successful pivot you’ve made and where is

Larry Fink, Chairman and CEO, BlackRock: it going next? So I’m not sure. I mean the narrative is like we’re making a huge pivot and a lot of publications are talking about it. I never thought of it was an incredibly large pivot. I mean what I do think what we’re doing is we’re just responding to our clients’ needs.

And so I would say the whole ecosystem is pivoting. I’m sure many of you in the room, you’re looking at private markets and public markets intermixed. And you’re going to be arbitraging liquidity. And probably one of the most important acquisitions we did was the smallest one, which was Prequent, which we closed yesterday. So Prequent is the largest data source for private markets.

We already have Aladdin and we already have eFront. And so our idea is to use the data, use our analytics to come up with better information related to all private markets, provide better transparency. And through better transparency, we’ll create better liquidity and through that, we’ll be able to then provide more private products for, let’s say, for retail, for maybe IRAs and all that. And so that could be a transformational change for the industry. And ultimately, our hope would be could we ever create private market indexes and wrap around ETFs around that.

So all of that is what we’re how we are evolving and thinking, but much of it is based on the needs of clients, not that we’re making a pivot. We just see the blending of public and private markets coming together. And it probably what I would say is probably happening faster than I ever envisioned. And so yes, so we had a we were growing all our private markets business, especially in infrastructure and private credit, but we were not growing as fast as the world was growing in those areas. So we did these two other acquisitions.

And in both cases, we only had one target. So we had GIP and infrastructure and HBS and private credit. GIP closed I think November 1 and as I said, frequent closed yesterday and HBS will close sometime in the latter part of the second quarter. And so we look at that as the ability to provide more to our clients. So and that was the industrial logic, the marriage of what BlackRock has are relationships with so many corporations.

As one of the largest shareholders of every company in the world, we have long standing, long dated relationships because a large part of the equity holdings are in ETFs and index funds. We’ve been with these companies for tens of years. So it’s not a transactional relationship. And so the industrial logic was if we have if we elevate our expertise and bring that all together, we could become one of the leaders. And we announced last year and couple of weeks, we’re going to have a big formal announcement on this AI data center fund that we announced last year with BlackRock, MGX of Abu Dhabi and Microsoft and NVIDIA.

We’re going to formalize all that announcement in the next few weeks with a couple other hyperscalers as a part of our partnership. And that was a great example of the industrial logic of our relationship with Microsoft. It was very deep. Our relationships in Abu Dhabi were very deep. Having the expertise of GIP in data centers, they own the third largest data center company in The United States or North America already and how can we build our data centers on behalf of these big hyperscalers.

And then today, we announced that we acquired the 50 excuse me, the 43 ports of Hutchison Whampoa. We already have ownership in ports alongside our partner MSC, the largest shipping company in the world. And they have a ports business called DIL and we’re partners with them. And so it’s the total consideration is about 22,000,000,000 It’s getting a lot of press because there’s two ports out of the 43, one of the Pacific Of Panama Canal and one is the Atlantic Of Panama Canal. And so big announcement and it was once again, we’re one of the Hutchison and Wampoa’s large shareholders where we’ve had a long relationship with them.

We have the expertise in GIP and our partnership with MSC is good. And so it was a great opportunity for the seller, a great opportunity for us and we’re very excited about it. But it’s just another example of the logic of the marriage of BlackRock with the expertise in a specific private markets business.

Dave MacKay, CEO: Congratulations. I know it was a hotly contested bidding process. So to come out on top must fill off a good this morning.

Larry Fink, Chairman and CEO, BlackRock: It’s going to take months to integrate it and to get approval. So we’ll probably have ownership of the Panama Canal’s ones very shortly though.

Dave MacKay, CEO: A few people happy about that.

Larry Fink, Chairman and CEO, BlackRock: Yes, I got a lot of tweets. I don’t even have an X account, I couldn’t say that.

Dave MacKay, CEO: The fact that you got your tweet out first is

Larry Fink, Chairman and CEO, BlackRock: what you do as well. But I got to get one, I got to read what they wrote.

Dave MacKay, CEO: When you think about some of the global wealth management leaders that talked about how far alts will penetrate the wallet of high net worth, ultra high net worth, even then to talk into mass consumer even with the lack of liquidity right now. And the number some the bogey some are throwing out including ourselves could be up to 15% of the overall investment. Like how do you think about the opportunity from obviously affluent institutional, but then into how do you think about mass?

Larry Fink, Chairman and CEO, BlackRock: So I think

Dave MacKay, CEO: because you’ve done a great job on ETF side. Yes.

Larry Fink, Chairman and CEO, BlackRock: So I think if we can deliver the theory of the marriage of frequent and eFront and Aladdin, we will provide the entire industry the data analytics. And then we could be working with our regulators worldwide on why they should be more open for the mass market. That’s what I’m saying. That probably has gotten the least of the publicity, but it probably is most significant thing we’ve done in terms of expanding the profile of private markets for the massive fluent and other platforms. So we’re really excited.

And so far the industrial logic from the time when we announced the deal to that we closed working on it, testing the data with our analytics. I think we’re going to it’s going to work really well.

Dave MacKay, CEO: Yes. It sure will. So let’s talk about the next major disruptive, Chen, that you’ve referenced and the disinflation that could come from generative AI. We’ve been experimenting with machine learning and reinforcement learning models with a modest degree of commercial success, I think. But in our own case, what we got out of eight years of building machine learning models and deploying them in our trading businesses and in our retail businesses was not so much the impact of the model, it was organizing our data and getting our data in a very great place.

So, now that we put generative AI and LLMs on top of that data, we’re accelerating our solutions much more quickly. So, that’s part of the great as you talk about sit back from a macro then in to your own industry, but first as an investor, like what are you looking for in your target company as far as how they deploy generative AI? What do you sense is the opportunity for returns for given sectors?

Larry Fink, Chairman and CEO, BlackRock: So, in 2017 Good question. Yes. But in 2017, we opened AI lab at Stanford University with a group of professors to help us on big data analytics. So our systematic equity platform can have better analytics related to analyzing trends, companies and all that. And if you look at our performance over the last seven, eight years, we’ve outperformed 80% of all fundamental equity platforms, probably half the fees.

It’s all model based investing. It’s all big data analytics. We had a fabulous year, started off this year well last year. I think last year Remind the audience what

Dave MacKay, CEO: you’ve gathered in flow assets last year?

Larry Fink, Chairman and CEO, BlackRock: As a firm, we raised $641,000,000,000 of new flows, it’s pretty impressive.

Dave MacKay, CEO: That’s the size of our whole EUM in The United States.

Larry Fink, Chairman and CEO, BlackRock: None of us are money. But last year, equity outflows were pretty large. But our quantitative equity platform raised about, I think, dollars 26,000,000,000 in net inflows. And I think it’s going to accelerate this year because of the performance and what it’s doing. But much of it had to do with our investment in AI.

We have a number of Stanford professors helping us with the analytics. When we started the lab, I mean, the first thing this group did, because Aladdin is such a large part of our business and price discovery obviously, if you don’t have the right prices, the analytics doesn’t work. And the one area where we struggled in price discovery was in the municipal bond market, especially in the small $30,000,000 municipal bonds in a little small municipalities. And so that was the first project we got this team of people in our lab to help us using big data analytics to have better pricing ability. So we could understand it with more texture, valuations of even small little municipal bonds for analytics and data.

And so but those are the types of things that we’re thinking about. If you think about with 11 point whatever trillion dollars that we’re responsible, we do a heck of a lot of trades. And you add it up to the year. I mean the whole foundation of BlackRock is built on our technology platform. I mean one of the better statistics that I’m pretty proud of, and this is all because of our investment in technology.

In February or end of twenty nineteen, we had about $7,000,000,000,000 of assets sent and we had approximately 19,000 to 20,000 employees. And today, we have 11, whatever it is, 11.6, 11 point eight and we have approximately 20,000 employees. So our margins went up over that period of time about five points.

Dave MacKay, CEO: And a lot of

Larry Fink, Chairman and CEO, BlackRock: it is just having better technology, better analytics to process all that. If you think about the amount of I mean, that’s just the and especially when you do index rebalancing, I mean, those days, I mean, it’s just mind boggling the amount of trades we have to do during the time of index rebalancing. So much of the success of BlackRock is on the foundational basis of our technology. And so we do spend a great deal of time investing in it for operational efficiencies, but now we’re spending a great amount on trying to get unique and different information for investing. I

Dave MacKay, CEO: mean, I love your system because you’re out there connecting to the world bringing enormous insight from geopolitics, from all the CEOs you meet, from the systems you see you bring back to that into the decision making process. And then now you’re gathering all this data from the bottom up. So when you think about when an outsider looking into the power of BlackRock and the power of what you’re leading, it’s pretty formidable. Because the whole thing is taking data to knowledge to value, right? That’s what we’re all trying to do that for our customers data, knowledge and value and data is just the cost, let’s say.

Knowledge is the cost. So you create Well,

Larry Fink, Chairman and CEO, BlackRock: our beauty is because we sell Aladdin as a service. Technology is

Dave MacKay, CEO: So data is revenue.

Larry Fink, Chairman and CEO, BlackRock: Is a revenue center. That’s the secret.

Dave MacKay, CEO: When you look at broadly in society and we don’t have a lot of time left, I have a couple more questions. How do you see generative planning other sectors that you’re most excited about and that you’re going to transform their business model and say, I got to get in there early or I’m in there early. Where do you see the investment opportunity? You talked really well about the opportunity for BlackRock to think and make decisions differently.

Larry Fink, Chairman and CEO, BlackRock: The generative AI is going to transform the science and all the sciences so rapidly, drug discovery. I met this one scientist who sold his he has a biotech fund. He sold something that went through stage one to one of the other big pharma companies. And the speed in which they’re able to successfully bring new drugs to market is way beyond anything we could imagine. And so I think when you go across every industry, you’re going to see applications AI and how that transforms a business.

If you even look at Walmart, I mean Walmart has had an extraordinary run. And if you spend time listening to Doug McMillan, he talks about their investment in AI. He talks about how they have better information of by store as to what clients are buying instantaneous and they’re able to then reposition every other store. If this one product is selling, they could reposition every other store and they’ve had so much greater dexterity and navigating their clients and client wants and needs and desires way beyond any other retailer. And so there is a great example.

The one issue that you have right now is AI right now is still the domain of large companies because the cost associated with AI is extraordinary. Maybe when we bring down the cost of AI and these models are far, far cheaper, then you could democratize it much faster. And hopefully, that’s what if you listen to Jensun Wang from NVIDIA, he talks about that what DeepSeek has done. It’s accelerated the democratization. And so we’ll see.

But it’s very clear to me The U. S. Technology advantage is what’s going to be driving higher stock prices over the course of the next five years and will continue to be driving opportunities for investors. So I look at it across the board, AI and robotics. So I was at a session a few weeks back seeing these robots of today, not tomorrow.

With robots that are having the ability to having AI abilities. You ask the robot to pick up a picture, you have scattered 50 pictures of 50 different famous people and you could ask the robot to walk over and find the picture of X, Y, Z. The robot can roll over there, look around and pick up that one picture. And so it’s not when you think about robots five years or four years ago, robot was almost its motions were through code, Okay, put a rivet in, put a rivet in, put a rivet in, put a rivet in. And so you could see all these big giant armed robots that are big cars and other items.

But that’s there’s that there was an AI. It was just designed through code to do a function. And now if you overlay AI and also now the visual technology that we have, the role of a robot in the manufacturing process is great. The other thing too, historically the robots that we had did chunkier things. There are now robots right now that are being focused on right now that they’re going to be building these suckers.

And so the tensile dexterity of these robots are beyond what we ever imagined just a few years ago. And so the ability to overlay AI with robotics, with visual technology is going to be transformational. And that’s why when you think about so many functions and so many things, it will be ultimately very deflationary. It’s going to transform a lot of things. Is there

Dave MacKay, CEO: anything that can go wrong?

Larry Fink, Chairman and CEO, BlackRock: Yes. I mean, everything can go wrong. Yes, I can be really pessimistic. It’s not

Dave MacKay, CEO: the European cardness.

Larry Fink, Chairman and CEO, BlackRock: Yes, many things can go wrong. But let’s be clear, humanity has proven it time and time and time again. We’re almost hitting the wall. And when sometimes we go, we get smashed in the wall, but we pick up the pieces and We reinvent. And reinvent.

And so I try to challenge everybody that it’s those who were pessimistic and fearful of the world and fearful humanity are generally not the long term winners. I mean, you could be right for a period of time, but the long term winners are dreamers. And dreamers who become and they’re optimistic and they go through those walls to find solutions. And I truly believe with technology, there’s going to be more dreamers, more opportunities, more transformations. But governments are going to have to be working with the private sector and making sure.

Yes, it’s going to be disruptive in some industries, but I can guarantee everybody in the audience, this is one thing I will guarantee to everybody, we are going to have shortages in this country and in every other country of electricians. Just the building out of these data centers, the amount of electricians we need and these are incredible jobs. Yes, we may need we may not need taxi drivers anymore, okay? We may have all vehicles that take us to point A to point B that is autonomous. The two things that technology is not going to change Well, the number one thing technology is not going to change is human touch.

In fact, technology probably makes us more disconnected. And so nursing, you could go on and on all of the industries where human touch is still going to be vital. And then when you think about what we need to do to building out all this stuff like electricians and other things, there are going to be enormous amount of job creations too. I’m not here to tell you I know where those jobs are going to be created and I’m not here to tell you where those jobs are going to be lost. But it’s going to require some type of interaction between governments and businesses and to try to find solutions so we could have a broadening of our economies and that’s the key.

So in

Dave MacKay, CEO: the last minute, I probably have 10 more questions. So we all deal with change management and I love what you said about dreamers because we talk about the same thing in our own organization. What prevents someone from dreaming and the fear of being wrong and the fear of dreaming, it’s so well said. But you have to lead differently to deal with this type of transformation because we’ve been through physical transformation, electricity, cars, you name it, we all leaders had to adjust to new technologies. Is there anything different about this journey that you’re going to lead differently within BlackRock and you look for CEOs to lead differently their companies to prosper and capture the opportunity in front of us?

Larry Fink, Chairman and CEO, BlackRock: Look, I mean, I’m 72 years old. I mean, I probably have more energy today than I did when I was 32. Somebody said 27, I’m not sure that. But we need to make sure, especially as a founder of the company, I want the company to do better without me than with

Dave MacKay, CEO: me. Hard to imagine that.

Larry Fink, Chairman and CEO, BlackRock: Sorry, I didn’t say it about succeed. I hope I do. But that’s what we’re going to be trying to do. But look, I think to be a leader of a company today, if you’re not a dreamer, you’re probably going to fail. You’re probably not going to see the big picture of what’s going on.

And you have to provide that type of inspiration to your workforce. And yes, we’re going to fail. We’re going to we’ll screw up. We’re going to have some losses going forward. But the question is, are we moving forward in a positive way that that’s going to produce much greater revenues?

And you cannot be frightened of failing. I think about my own career. My failure in my last year at First Boston was in those ashes of my failure was a fertilizer to create BlackRock, because I failed at First Boston because we did not have proper risk analytics to understand the risk we were taking. And it was that was the foundation of what we started BlackRock that we were going to develop our own risk technology and that was Aladdin and that was the whole foundation of the firm. 25% of the people we hired in the first week of the firm were people from technology, which was kind of weird.

Most people questioned what are you doing, but that was it. So to me, you learn so much more from failure than you learn from success. And generally, when you have the wins to your back, you always see many success stories. The most important success story for me are those who could repeat it or could have that successful journey for thirty or forty or fifty years. And I use sport analogies all the time.

I’m not particularly interested in watching a team that every ten years, every fifteen years wins the pinnacle in their sport. But when you can find a team that can win three, four, five or you could be a coach like Phil Jackson that

Dave MacKay, CEO: you take five

Larry Fink, Chairman and CEO, BlackRock: for the Chicago Bulls and four for the Lakers. And there’s some ingredients there that you create. I mean, they’re all wonderful athletes, but how do you gel these wonderful athletes into a team? And how can you repeat it and repeat it. I would say the same analogy for business leadership.

How do you it’s very easy for anyone to be having one or two good years. But how do you how can you constantly refresh yourself and refresh the firm and find the next long term trend to build the firm? Get on another curve. And so to me, those are the big success stories and that’s your journey.

Dave MacKay, CEO: What great words to end on. I think you can see why global leaders around the world, CEOs, investors, we all seek your ideas and your input because you see the world so clearly and you are a dreamer. But I

Larry Fink, Chairman and CEO, BlackRock: could still be clearly wrong.

Dave MacKay, CEO: We’re all wrong. You learn from it. Right. On behalf of everyone online, we’re so many people online in the rooms. Larry, thank you for sharing your expertise.

That was just outstanding. Thank you.

Larry Fink, Chairman and CEO, BlackRock: Thank

Dave MacKay, CEO: you for being the leading role.

Larry Fink, Chairman and CEO, BlackRock: Thanks, everybody.

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