BlackRock Investment Institute just shifted its tactical view on broad emerging-market equities from overweight to neutral. The move, part of the firm’s 2026 mid-year global investment outlook, applies to a six-to-twelve-month horizon and represents a notable retreat from one of the asset management industry’s more influential voices on EM allocations.
The reason isn’t the usual suspects of currency instability or political turmoil. It’s artificial intelligence, or more precisely, how dangerously concentrated the AI supply chain has become in a handful of countries.
The AI concentration problem
BlackRock’s concern centers on Taiwan and South Korea. Both are critical nodes in the global semiconductor and AI hardware pipeline. On a map, they look like diversification. In practice, they’re exposed to identical supply chain shocks. A disruption to one part of that chain can ripple through what investors might have assumed were uncorrelated positions.
BlackRock concluded that these concentration risks now outweigh the benefits of geographic diversification in broad EM equity exposure.
