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I believe that the role of infrastructure funding around technology, whether it's funding data centers or funding chip purchases. As I said before, I think we're going to have markets for, you know, investing in computing power. We will have a futures market for computing power. This will be the next revolution in finance.
And this will happen thanks to the strength of the United States capital markets, which have the ability to finance these new technologies. So the United States and other places in the world will be able to become leaders in new technologies. You know, you mentioned 50 years. So I'm curious. I mean, have you ever seen anything like this, Larry?
We have companies that were the most profitable in the world, and they're making the choice to burn—that's not the right word—deciding to no longer have free cash flow, to no longer return capital to shareholders, because they have to be in this race to make sure they do n't get left behind in the future of AI.
When I listen to me say this, don't you see some disturbing points in it? I mean, I've been talking to some leaders this week and last week in this sector. Their biggest concern right now is that supply is not keeping up with demand. And you see how this is reflected in the stock prices of memory manufacturers.
Okay, we have a demand for memory that is greater than the supply. Apparently, they were able to significantly increase prices. I don't know how sustainable it is. Maybe in 3-4 years we will have enough supply. But, you know, and as a big investor in data centers, we see that the demand for computing power is not slowing down, it's growing faster.
The problem we have as a country is that we are not investing fast enough. So, I have the opposite opinion. So you, we even...we need to do even more. I mean, a trillion dollars in capital spending from six companies— that's not enough. I think it's not just about that. We are not investing in our power grids fast enough.
We don't have enough electricity supply, and that's what's causing problems at the state level, where there's concern about electricity prices for consumers, which is a perfectly valid question. But other states that have more energy and more capacity to deliver it, and delivery that doesn't raise the price for the consumer, will be the main winners in growth.
Yes. So, last quarter, we signed contracts to supply almost 1 gigawatt of energy in Pennsylvania. Of course? We are funding another large data center in the state . And in my conversations with all the hyperscalers, demand exceeds supply. And yes, you are right. These large companies were not previously burdened with assets on their balance sheets.
And now, their business has changed. And that's exactly what capital markets are for. And I promise you, it will be a great investment for people. Once you understand that the basic business model will eventually generate enough revenue and profits to pay for all those data centers. They are not cheap.
Yes, they cost 50, 60 billion dollars for 1 gigawatt. What I'm afraid of, Dave, is not the demand side. I'm concerned about whether all of society can benefit from AI? Because computation is very expensive right now. My question to all hyperscalers is not whether they have enough demand, but how quickly they can reduce the cost of computing.
I'm not worried about BlackRock paying for AI, and I think, you know, we've been a huge investor in that, and our systems capital team has really benefited from the flows and the profitability. But I am worried about small and medium-sized businesses. How will they be able to compete in this new world of AI technology?
So the biggest question I'm asking behind the scenes is: how quickly can we reduce the cost of computing? And well, they tell me it's like Moore's Law, and how quickly they can develop faster and faster analytical systems to speed up computation. But until we develop better technologies and systems in our grid to provide more energy, more stable energy, I believe that the country, the States, should be energy neutral.
It shouldn't matter to us whether it's solar energy or hydrocarbons. We need to be there, but we don't have...you know, we need to manufacture solar panels in the United States, build energy storage systems. At least we can do battery storage here. We do it. So these are my concerns. I'm not worried about the bubble.
I'm worried that we don't have the capacity to build fast enough. And then I look at China. China is building 100 gigawatts of nuclear power. They're building, oh, almost 100 gigawatts of solar power. So, they are preparing for this AI revolution and the need for energy. We're not doing enough of this, and it actually scares me when I see states saying they're going to impose moratoriums.
This is not an option. The answer is, how do we get, how do we deliver more energy faster? Why don't we all start working together and say, "How can we supply more energy?" So, we are not raising electricity prices, but we can become the center of the AI revolution. You know, can I ask you about leverage?
Every morning we come here and check the KOSPI, which had a 6.9 percent fluctuation. The President of South Korea said that the market there, in her opinion, is quite unstable. In many ways, it's credit ETFs and two big names. Which we don't actually do. Right, right. But does that bother you? Is this a global risk factor?
No, I'm really not worried, there's not a lot of leverage in this system compared to 2008, 2009 . Although, perhaps the Korean market has such built-in leverage. Without a doubt, as I said before when I was here. I have always been worried about leverage in Bitcoin and cryptocurrencies. There were too many leveraged players .
That's why we had this purge, and I think there's more stability at these levels . But no, we don't see that much hidden leverage. For the scale of capital markets today, leverage is not that great. That is, this does not mean that there are no individual cases. But no, as I said in my prepared remarks this morning, I am very optimistic about the markets for the next 12 months.
I think the technological revolution will provide better profits for more companies. I mean, think about BlackRock. We have increased our earnings by 260 basis points over the last 12 months. This is largely due to the use of an increasing number of technologies . Will you be able to maintain these profits?
You said that you don't see a margin of 45-46% as a limit. You referred to 2021. Your business, however, is very different from what it was in the 21st century . So, I'm wondering what mechanism will get you back above 47%? Continuing to drive growth in our private markets business, where we are seeing incredible momentum.
Continuing to create opportunities in the pension space that I believe will drive better margins. And just making sure we use technology as quickly as possible to do more with less . I mean, David, our headcount hasn't changed, and we have a trillion dollars more in assets. Okay , here's what you see.
We can use technology to process more transactions, perform more activities. So, we can do this. We can effectively utilize our human capital through technology by working together with them. We use AI, and the amount of code we write with our developers has increased significantly. So we're able to do more and more, and as AI and computing capabilities, as I said, become faster and cheaper, that will provide even higher returns not just for BlackRock but for other firms as well.
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