BlackRock, Inc. (BLK) Earnings Call Transcript & Summary

Good afternoon. It's great to see a packed room. I know it's clearly very volatile times, but we're back to the 10-year being where it was lowest since October and probably where it was lower than a year ago. That said, we have an S&P up almost 40% over 2 years and double digit over the last 1 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 McKay, obviously, on the stage with Larry Fink, Chairman and CEO of BlackRock.

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, so thanks so much for spending the time today. And...

Hi, everyone. Good to be here.

Thank you.

Interesting day, lots going on at BlackRock, big announcement we'll talk about today. And I know the President, he is very happy about the announcement you made today. And -- but everyone knows Larry, I don't think he needs an introduction. It's founded in 1988. $211.8 trillion plus today, maybe a little market correction going on but...

I'd tell you what's been going on, it sounded as...

Yadda, yadda, yadda, right? It's 1988, 0 to $2 billion, I think, when you went public and then $211.8 trillion. 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 politician, 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 convening 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 the United States and you look at North America, Mexico, kind of how do you think about the global economy and then some of the impacts of what's going on in the last kind of 24, 40 hours on tariffs, but kind of a general sense, then we'll move to Europe and we'll move to Asia.

That's okay. Well, first of all, thanks, Dave, and thanks for the partnership. We do a lot together.

We do, yes.

So let me just start off and say the world is fine. I mean a lot of noise, we'll get by this. The United States will get by all of, I would say, social tensions between 2 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 buy it and we move forward. And so I'd 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 obtained and what does that all mean? And so we're all going to have to rejudge and rethink about how across any specific company or country, but overall, the world is 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 attention right now about the role of tariffs and how that's going to play out and it's going to -- it's -- 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 our business is going to be really benefited, but she doesn't know how that is all going to balance out in the -- 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 renavigate. I think the trend's, though we're going to be net-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 yes, we have different governments. We have different orientations. We have a reordering of global trade, reordering everything else, but we will find solutions. We move forward. And so there's -- yes, there's no question, in the next 6 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 out, 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 10-year treasuries are or 20. I see a lot of inflation in the short run. And I think -- and we were talking about it earlier, Dave, every CEO I 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's 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&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 that starts rolling in through the economy? And even I had a conversation with one of the large agricultural CEOs in the United States. And again, they said this is going to show -- the deportations in the short run are going to show up in elevated agriculture 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 shortage, which is going to elevate food prices. And so all of that is 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 10 years would 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 2 years, 3 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, a lot of noise, a lot of issues, and then we had trade agreements even with -- between Canada and U.S. and Mexico and the U.S.

A 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 has to be measured and looked upon. And so we'll see this -- how this plays out, but I'm -- we expect in the short run volatility, we expect elevated inflation, a moderation of the economy in the short run. But over the course of 3 quarters, 4 quarters, I think we're going to be resuming a pretty good trajectory.

Is it fair to say that America does it need more jobs, it needs more 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 3.8% and 4.2%, and in many industries already, we have labor shortages. And the CEO talked to in agriculture, if they can't get the workers -- and here's an interesting statistic. 70% of workers in agriculture who were not born in the United States. They may have -- 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 you -- 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 that -- 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, a 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 all 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.

When you read the popular media, one of the challenges I think America is trying to solve for is 40% of the global manufacturing capacity is 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. And...

Yes. Look, if you look at how technology is reshaping so many industries, one of the -- 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 in things like that. So -- and it could be far cheaper. I mean a drone costs $600, an advanced drone costs $6,000. And so the question -- and a tank costs, I don't know, millions of dollars and aircraft carriers cost billions of dollars. And so you could really -- you start focusing on how technology is going to be reshaping. I mean, it actually reshapes almost every industry.

We're democratizing warfare.

Yes, as well. Right, so. .

So we arrived in Davos in the third week or second week of January, feeling generally, to your point, really good about things. We -- October, November, December felt great all our businesses, you're doing well. And we arrived in Davos on -- to feel a real downer among our European friends.

Yes.

A real downer across the board and a lot of self-inspection and talk about how you see Europe and what you felt and you talked to so many leaders there. And where's Europe's path? Because this could be a blessing in disguise.

And we have a new leader in Germany, former BlackRock Chairman of the...

You hosted your dinner, so yes.

Let's be clear. Europe has been in a bad trajectory for 10, 12 years. Europe is so overly regulated. The difficulties for Europe to move forward, it has been so present. You talked to CEOs throughout Europe and they're 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 was the bottom. I mean they were so pessimistic and bearish. Once again, you just had -- it was a great opportunity to go along 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.

Counter trade.

Everybody in Davos thought the U.S. was going to become stronger and stronger and stronger, bearish in Europe, over that's a badge, you would have followed them, you would have lost a lot of money. Look, I think Europe is now for the first time in 12 years, really taking responsibility. They're announcing much larger budgets for defense. They're going to build it there. It's -- it has -- 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 20-odd years, so many entrepreneurs who were 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 in fractions of what the valuation for the equivalent company is in the United States. And they were in some industries -- you need to look at the equivalent company in the U.S. and the equivalent European company, the European companies will traded 4 or 5 multiple points difference. And so that converged a little bit in the last 30 days, 40 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 Meloni, now it's another AI data center. These are the types of things that they 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 at 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.

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 and therefore, needing to...

Growth and productivity, and if you look at the productivity numbers of Europe versus the U.S., they're -- I mean, it's so...

Well, the world and the U.S. almost.

Yes. But Europe has really declined their productivity quite a bit over the last 10 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.

What's the secret sauce then in the U.S. in such incredible productivity growth, risk taking.

Yes.

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'd say 3 things. A, because we have -- we participated in a number of wars, none of the wars were really on our soil, yes? And so when I think about Europe, Europe by having 2 horrific world wars on their soil has created generations of generation of fear. And the 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, we're criticized for having low saving rates, where we have higher equity participation, higher home ownership. So we were owning assets as a -- and a lot of it has to do that Americans historically, maybe not in the last 5, 10 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 unsettling this 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 -- 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, now 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 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.

30 years.

For 30 years. I was in Australia last week -- I'm trying to think, was it last week? Yes, last -- about 2 weeks ago. And I was struck in our -- in BlackRock's office in -- I think it was in Sydney, not in our Melbourne office. I was struck. Everybody is watching television there, and I was dumbfound, what's going on. I mean there's 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, they 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 then if you want to buy equities or consume more. And so much of it has to do with the strength of our capital markets and provide 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 electrical -- electricity utilization. And as estimated by the U.S. government that by 2030, 5 years from that will be 8%. We're talking hundreds of gigawatts of new power that's going to be necessary. Well, where is that 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 markets.

Canada.

Maybe can...

You thought so, yes or no.

No, but I was -- I thought Canada could be a good source of some of that, but Hydro-Québec will need to build more.

Yes, I now.

And upgrade.

Nuclear. Yes, [indiscernible] in particular.

But that does...

Very fair. And that works...

It does throw open the whole idea about nuclear for -- what role will nuclear play, when you -- and 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 that nuclear power, this year.

Do you know the basis of coal versus -- it's almost...

It's going -- coal utilization is going down. It's -- you go to -- and I mean another juxtaposition in the U.S. and China, we're moving away from EVs or the narrative is. I would say within 5 years, there will not be an internal combustion engine in China. It will all be EVs. Probably in towns like Shanghai, there's already 40% of EV. 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, yes, 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 on how to deploy capital from public markets to private markets and some significant acquisitions, BPI, obviously in the news today.

Yes, in the news today, yes.

Talked a little bit about it being a great success. So can you talk a little bit about the pivot you're making, markets changing, alternatives, how do you think about investing your clients' money and the very successful pivot you've made and where is 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, 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 Preqin, which we closed yesterday. So Preqin 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. It's, 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 I'd -- we were not growing as fast as the world was growing in those areas. So we did these 2 other acquisitions. And in both cases, we only had 1 target. So we had GIP and infrastructure and HPS and private credit. Now GIP closed, like I think, November 1. And as I said, Preqin closed yesterday and HPS 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, our 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. On -- we announced last year in a 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 of 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 in 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 out 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 a -- the total consideration is about $22 billion. It's getting a lot of press because there's 2 ports out of the 43, one of the Pacific of Panama Canal and one is the Atlantic of Panama Canal. And so a big announcement. And it was once again we're one of Hutchison Whampoa's large shareholders. We're -- we have 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 the specific private markets business.

Congratulations. I know it was hotly contested bid in process.

It was.

So to come out on top must feel awfully good this morning.

Well, it's going to take months to integrate it and to get approval. So we'll probably have ownership of the Panama Canal once -- very shortly though.

Yes, there'd be a few people happy about that.

Yes, I got a lot of tweets. I don't even have an X account. I can say that. I got that.

Thought that you got your tweet out first before you achieve it as well.

In fact I got to get one now. I've got to read what they wrote.

When you think about some of the global wealth management leaders have talked about how far Alts will penetrate the wallet of high net-worth, ultra-high net worth, even then if you're talk into mass consumer even with the lack of liquidity right now, and the number, some -- the bogeys some are throwing out, including ourselves, it could be up to 15% of the overall investment wallet. Like how do you think about the opportunity from obviously affluent institutional, but then into -- how do you think about mass because you've done a great job on the ETF side, so.

Yes. So I think if we can deliver the theory of the marriage of Preqin 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 why I'm saying that. 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 mass affluent and other platforms. So we're really excited. And so far, the industrial logic from the time when we announced the deal to how we closed, working on it, testing the data with our analytics. I think we're going to -- it's going to work really well.

Yes. No, it sure will. So let's talk about the next major disruptive trend that you 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 8 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 your 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.

Yes.

So that's part of the great but as you talk about and 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? And what do you sense is the opportunity for returns for given sectors and -- a lot of questions?

Yes, no, but in 2017, we opened an AI lab at Stanford University with a bunch of processors, 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 7, 8 years, we've outperformed 80% of all fundamental equity platforms at probably half the fees. It's all model-based investing. It's all big data analytics. We had a fabulous year, started out this year well last year. I think last year...

Can you just help remind the audience what you gathered in flow assets last year?

As a firm, we raised $641 billion, that's all of the net inflows, it's is pretty impressive.

That's the size of our whole AUM in the United States where you are.

Not of it's our money. But last year, equity outflows were pretty large. But our quantitative equity platform raised about, I think, $26 billion of 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've struggled in price discovery was in the municipal bond market, especially in the small $30 million municipal bonds in little small municipalities. And but -- so that was the first project we got to 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 that with 11-point whatever trillion dollars that we're responsible, we do a heck a lot of trades and you added it up 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 2000 or end of 2019, we had about $7 trillion of assets. And we had approximately 19,000 to 20,000 employees. And today, we have 11 whatever it is $11.6 trillion, $11.8 trillion and we have approximately 20,000 employees. So our margins went up over that period of time about 5 points.

So you're pivoting.

And a lot of it is just having better technology, better analytics to process all that. If you think about the amount of -- I mean just the -- and especially when you would 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.

Man, 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 into the decision-making process. And then now you're gathering all this data from the bottom up. So when you think about 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 we're all trying to do that for our customers, data, knowledge and value and data is just a cost, let's say and knowledge is a cost until you create...

No, our beauty is because we sell Aladdin as a service, technology is a revenue center, that's the secret.

When you look at broadly in society, and we don't have a lot of time left, and I have a couple more questions, how do you see generative AI playing other sectors that you're most excited about investing, 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.

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 1 to one of the other big pharma companies and the speed in which they're able to successfully bring new drugs to market, it is way beyond anything that 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 leave and look at Walmart, I mean, Walmart has had an extraordinary run. And if you spend time, listen to Doug McMillon, he talks about their investment in AI. He talks about how they have better information at -- of by store as to what clients are buying instantaneous and they're able to then reposition every other store, if this 1 product is selling, they can reposition every other store. And now they've been -- they've had so much greater dexterity in 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 even -- are far, far cheaper, then you could democratize it much faster and hopefully -- and that's what -- if you listen to Jensen Huang 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 5 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 asked a 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 XYZ, the robot can roll over there, look around and pick up that one picture. And so it's not -- when you think about robots 5 years or 4 years ago, robot was almost -- it was -- its motions were through code. Okay, put a rivet in, put a rivet and put a rivet and so you could see all these big giant armed robots that big cars and other items. But that's -- there's not -- there wasn't 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 and 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 anything that can go wrong?

Yes. I mean, everything can go wrong whether it's -- I mean, yes I can be really pessimistic. Yes, no. But I mean there are -- yes, many things can go wrong. But let's be clear, humanity has proven 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 of humanity and 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 could guarantee everybody in the audience, this is 1 thing I will guarantee here 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 not need taxi drivers anymore, okay? We may have all vehicles that take us to point A to point B that is autonomous. The 2 things that technology is not going to change, well, the one thing technology is not going to change is human touch. In fact, technology probably makes us more disconnected. And so, nursing. Well, 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 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, about 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, and we've -- 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?

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 of that. But we're -- I -- we need to make sure, especially as a founder of the company, I want the company to do better without me than with me.

I can imagine that, but.

Yes, and so didn't say you will all 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'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 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 we doing? But that was it. So to me, you learn so much more from failure that you learn from success. And generally, when you have the wings to your back, you always see many, many success stories. And the most important success story for me are those who could repeat it or could have that successful journey for 30 or 40 or 50 years. And I use sport analogies all the time. I'm not particularly interested in watching a team that every 10 years, every 15 years wins the pinnacle in their sport. But when you could find a team that can win 3, 4, 5 or you could be a coach like Phil Jackson that you take 5 for the Chicago Bulls and 4 for the Lakers and there are some ingredients here 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. This -- I would say, the same analogy for business leadership. How do you? It's very easy for anyone to be having 1 or 2 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.

To get on another curve.

And so to me, those are the big success stories, and that's your journey.

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're a dreamer.

But I could still be clearly wrong.

We're all wrong. You learn from it, right? On behalf of everyone online where so many people online in the room. Larry, thank you for sharing everything. That was just outstanding. Thank you for being a leading rock.

Thank you. Thank you, everyone.