BlackRock CEO Larry Fink Thinks a Data Center Moratorium Could Trigger a Recession. If He's Right, Here's What History Says to Do Next.

It's no secret that Americans don't like artificial intelligence (AI) data centers.

According to polling by the Gallup Organization, 71% of Americans oppose the construction of AI data centers in their area. Nearly half of all Americans (48%) are strongly opposed, while just 7% strongly support them.

With election season in full swing, it's no surprise that politicians on both sides of the aisle have proposed temporary moratoriums on future data center construction. But not everyone is thrilled about the prospect of a moratorium on data centers.

On Wednesday, billionaire Larry Fink, the CEO of BlackRock (NYSE: BLK), warned that a data center moratorium could have dire economic consequences. "If we have a moratorium of some sort in this country, we will be in a recession," he told CNBC in an interview.

If Fink is right, what should investors do? Luckily, history provides a clear answer.

Image source: Getty Images.

Why it could spark a recession

BlackRock is one of the world's largest investment managers, with more than $10 trillion in assets under management (AUM), so Fink clearly knows a few things about investing. And his analysis of why a data center moratorium could trigger a recession makes sense.

"So much of our economy is based on the build-out of this capex," he explained, referencing estimates that total AI capital expenditures could climb above $1 trillion in 2027 and even surpass $5 trillion by 2030.

Recent analysis by Goldman Sachs (NYSE: GS) Research suggested that nearly half of the S&P 500's 2026 earnings growth can be attributed to AI-related investment. Suddenly losing that much growth, at a time when real GDP is only growing at about 2% per year, could indeed trigger a recession.

And if it does, history is clear on the best course for investors to take.

What the history shows

You might think that the best idea would be to sell your stocks at the beginning of a recession and buy them back again once the recession is over. But that actually hasn't been the best strategy historically.

Research by The Motley Fool tracked the S&P 500's performance during every recession since 1980, and the findings were surprising. Because the stock market is considered a "leading indicator," it had, in most cases, started to recover before the recession was over. In fact, in half of the recessions since 1980, the S&P 500 actually gained value (from 4% in 1990-1991 to 15% during the 1980 recession).

Complicating matters, because a recession is technically two or more consecutive quarters of negative economic growth, we never know for sure that we're in a recession until six months after it starts. Pulling your money out of the market at that point may mean selling close to the bottom.

More importantly, the stock market has always recovered after a recession and has gone on to hit new highs. History shows that the smartest strategy for investors during a recession is to focus on the long term and stay invested in a diversified stock portfolio.

John Bromels has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends BlackRock and Goldman Sachs Group. The Motley Fool has a disclosure policy.