Larry Fink Warns Data Center Slowdown Could Push US Into ‘Recession’ as Trump Orders Facilities to Generate Their Own Power and ‘Make Deals’
President Donald Trump mandated that new data centers generate their own electricity, as BlackRock Inc. (NYSE:BLK) CEO Larry Fink stated that slowing data center construction will increase inflation.
Trump’s Power Generation Mandate
On Wednesday, President Trump said on Truth Social that he wants data center developers to produce their own power. “New and large, in some cases gigantic, data centers are mandated by me to make their own electricity, and give or sell any excess back to the local community, or grid,” Trump stated.
To counter local opposition to these facilities, Trump suggested companies offer financial incentives to residents. “If companies want to make their Data Centers popular, pay the community, and/or individuals within the community, a dividend,” Trump noted.
He added that facilities facing opposition become popular when financial agreements are reached, concluding, “Make Deals, and get them built!”
Fink’s Economic Warnings
Simultaneously, BlackRock CEO Fink warned that obstructing artificial intelligence (AI) infrastructure expansion carries economic risks.
Speaking to Bloomberg Television, Fink linked construction delays directly to rising prices. “If we don’t build out these data centers, it is actually more inflationary because the cost of compute is so high right now,” Fink said.
He added that a slowdown in the build-out of this technology could “jeopardize the economy.”
Fink also addressed the broader economic impact in a separate CNBC interview. “If we have a moratorium of some sort in this country, we will be in a recession,” Fink said.
Wall Street analysts estimate that total AI capital expenditures could exceed $5 trillion by 2030, according to CNBC.
Fink noted that local opposition is often based on “misinformation” and emphasized the economic benefits of the industry.
“Data centers are not the problem. They’re creating more new jobs than ever before,” Fink stated, adding that the investment creates demand for construction workers and energy infrastructure.
How Has the Stock Market Performed?
The S&P 500 index has advanced 12.45% year-to-date. Similarly, the Nasdaq Composite index was up 13.73%, and the Dow Jones gained 8.50% YTD.
On Tuesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq-100, respectively, closed mixed. SPY rose 0.34% to $769.05, while QQQ declined 0.10% to $717.63. Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), ended 1.05% higher at $524.36.
In premarket trading on Wednesday, SPY was up 0.25%, QQQ rose 0.62%, and DIA advanced by 0.44%.
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