"We are not in an AI Bubble" - BlackRock, a capybara and Yoda opine
By Holly Mackay, Founder & CEO
27 Mar, 2026
Two things have caught my attention this week. A look ahead from the biggest of financial Big Dogs, Larry Fink, CEO of BlackRock. And Samba, the escaped capybara, which is the most exciting thing to hit Hampshire since Howards Way aired in 1985.
The capitalist canines don’t come much bigger than Larry Fink, CEO of BlackRock. The world’s largest money manager with an unfathomable $13 trillion of consumers’ money under management. Every year he writes a letter where he shares his views on what’s going on in the money world right now. You can Google the letter – it’s well worth a read.
The price of a capy-barr-el of oil?
In an interview on Wednesday with the BBC, he said:
There’s not going to be an outcome that’s somewhere in the middle. It’s going to be one of two extremes. Is Iran a country which can be accepted by the international community? Can Iran be a country which participates in the world again? If that outcome could occur then you could have Iranian oil back into the marketplace alongside the growth of the Venezuelan oil and you could paint a picture where oil prices could be lower than they were prior to the Iranian war.
He followed this up with an alternate scenario. You’ll note he is not making a call either way. Frankly, there is so much uncertainty right now that Samba has as much chance of predicting global markets and a potential future capybear-a market as any of us.
If there is a cessation of war and yet Iran remains a threat – a threat to trade, to the Straits of Hormuz – then I would argue that we could have years of oil above $100, closer to $150.
If this latter case happens, then his prognosis was 4 simple, powerful words.
We’ll have global recession.
OK. Ouch.
Even if we press pause now, the financial impact of this war will have already been felt by pretty much every reader. The FTSE 100 has fallen by more than 8% since the outbreak of the war – housebuilders, miners, banks and airlines have been the most impacted.
Are we in a capybarAI bubble?
Back to Mr Fink’s letter and of course he shares his views on AI. He was quite clear in his BBC interview that he does not believe we’re in an AI bubble. He sees a race for tech dominance, which will inevitably have a few who fall by the wayside, BUT AI is changing everything we know about how companies and the jobs market operate.
Here is one blistering thought I found interesting.
Since 1989, a dollar in the U.S. stock market has grown more than 15 times the value of a dollar tied to median wages. Now AI threatens to repeat that pattern at an even larger scale – concentrating wealth among the companies and investors positioned to capture it.
I’ve re-read this sentence about 10 times. I urge you to. It’s a pretty powerful call to action for those sitting on the investment sidelines worrying about a bubble.
This stark difference in outcomes (those who adopt and embrace versus those who don’t) is known as ‘K-shaped outcomes’. Some firms are at the top of the K and others are at the bottom. AI is exaggerating this, and there is limited middle ground in 2026. Here’s one example – Walmart reached its highest-ever valuation two weeks after Saks went bust. For those who prefer their finance a little more futuristic, you may prefer to take your steer from Yoda who prophesised the AI K-shaped outcome thus. “Do or do not. There is no try.”
I think this makes the case more powerfully to invest in funds and not individual shares. Buy the collective herd and not the lone antelope robot. And minimise the pain from the inevitable ones, which end up at the bottom of the K.
So back to what do we do?
We can always look for tactical opportunities when markets swing. I’ve traded some oil over the last few weeks. Had a play with small sums, but that’s just glorified gambling. More sensibly, you could argue that the FTSE 100 is on sale – an 8% reduction since the start of the war. This is always an interesting long-term way to think about stock market falls. Shares are one of the only things in life we hate buying when they are on sale.
Asian equity markets – mostly Korea, Taiwan and Japan – have seen the steepest falls since the conflict escalated due to their higher dependence on energy imports from the Middle East. Oversold? Some argue this is the case. Japan has sustained wage growth, improving domestic demand, and a structural shift away from deflation, which makes it a compelling case for some analysts.
On the other hand, there is so much uncertainty over the short-term (which may yet get a lot worse) that Samba genuinely has as much chance of making the right short-term call as any analyst. Munch one melon for Sell. Two melons for Buy. She could also join the Monetary Policy Committee whilst she’s at it and set interest rates too.
In the absence of anyone catching Ms. Capybara and setting her to work as a financial analyst, I will leave the last word to Larry Fink, who cuts to the chase with these powerful words.
Over time, staying invested has mattered far more than getting the timing right. Over the past two decades, every dollar invested in the S&P 500 grew more than eightfold. Miss just the ten best days, and you would have earned less than half. And some of the market’s strongest days came amid the most unsettling headlines.
Don’t forget about Capytal Gains Tax
With just 9 days left to go this tax year, and with the tax take creeping ever higher, don’t forget to use it or lose it with ISA allowances. Up to £20k total in shares ISAs and/or Cash ISAs (that’s a total – not £20k in shares ones AND £20k in cash ones), and usually up to £60k in pensions for working people with some caveats around what you did in previous years and what you earn. But also – klaxon – you can start most options with £100 or less too, so don’t feel put off by these maximum numbers.
Finally, if you have the heebie-jeebies about markets today, you can use your allowance and transfer in cash. (You can just keep cash in a Stocks & Shares ISA for the short-term and decide what shares to buy down the track.) Set up a monthly instruction over the next 12 months and slowly drip feed in. This way, you’ll avoid piling in at the worst moment and smooth out your entry point. Our tables will help you to pick the right ISA or pension for you.
Over and out for this week. Have a great weekend, everyone. I’m driving my son up to Nottingham for a look at the Uni (and the nightclubs). With a quick detour via the River Itchen to say hello to Samba.
Holly
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