‘What Happens to Everyone Else’ If AI Fuels Inequality?

The world is on the brink of repeating post-Cold War mistakes that widened global income inequality, according to a Wall Street chief—and it might be about to do the same with AI.

More wealth was created in the decades after the Cold War than in any era before, BlackRock (BLK) CEO Larry Fink told the billionaires and heads of state gathered at Davos this week. That wealth, he said, “accrued to a far narrower share of people than any healthy society can sustain.”

Now AI threatens to do the same, according to Fink, leader of the massive money manager. Those in the room, he said, risked being “out of step with the moment: elites in an age of populism.” The test, he said, is “whether capitalism can evolve to turn more people into owners of growth—instead of spectators watching it happen.”

The Post-Cold War Report Card

Globalization gutted blue-collar jobs starting in the 1990s. Manufacturing workers were told to retrain, but many never recovered, and towns that depended on them were hollowed out. Much of the gains of a new era went elsewhere, and these changes helped spark a populist backlash still reshaping affairs on both sides of the Atlantic.

Federal Reserve data shows that the wealthiest 1% of American households now hold 31% of all net worth, while the bottom half of households owns less than 3%. That gap has widened since the Fed began tracking it in 1989.

“Prosperity isn’t just growth in the aggregate,” Fink said. “It can’t be measured by GDP or the market caps of the world’s largest companies alone. It has to be judged by how many people can see it, touch it, and build a future on it.”

‘What Happens to Everyone Else’

Just as globalization emptied American and European factory floors, Fink warned, AI could do the same to those in the cubicle class. “Early gains are flowing to the owners of models, data, and infrastructure,” he said. “The open question is what happens to everyone else.”

Microsoft researchers ranked occupations by AI vulnerability last year. The top of the list was almost entirely white-collar, with translators, journalists, data scientists, and financial advisors among the most vulnerable. Jobs requiring physical labor or direct human interaction, like nursing assistants and massage therapists, ranked lowest.

“‘If AI does to white-collar work what globalization did to blue-collar, we need to confront that directly,” Fink told the crowd in Davos, suggesting that leaders drop the “abstractions about ‘the jobs of tomorrow'” and make real plans for sharing AI’s economic gains.

Fink’s prescription, offered in a conversation at Davos with Nvidia CEO Jensen Huang, was for pensions to invest more in AI infrastructure—the kind of assets BlackRock manages.

“We need to make sure that the average pensioner and the average saver is part of that growth,” he said. “If they’re just watching it from the sidelines, they’re going to feel left out.”