Norway’s $1.8 Trillion Fund Chief Warns AI Stock Bubble Could Burst

Nicolai Tangen, who runs Norway’s sovereign wealth fund—the largest in the world—said valuations for AI-driven companies have grown so fast that a sharp market correction is now a real risk [222560]. The fund holds roughly 1.5% of all globally listed stocks and has significant exposure to U.S. tech giants that have led the AI rally, meaning a downturn in the sector would directly hit its bottom line [222560].

Tangen did not predict a crash but stressed that investors should be prepared for sudden drops [222560]. His comments come as global markets show signs of nervousness, with some investors already seeking alternatives outside the AI trade [218986].

The warning aligns with other market signals. The number of stocks in the S&P 500 trading against the broader index’s daily trend has reached an all-time high, suggesting rising turbulence beneath a calm surface [221573]. While the index may look stable, individual stocks are not moving together, and this hidden volatility makes stock-picking riskier [221573].

Despite the concerns, some investors remain committed to the sector. Chinese fund managers kept AI and chips as their top investment picks in August, even after a sharp global sell-off in semiconductor stocks in July [222294]. However, more of them moved to protect themselves against further tech losses, according to a survey by BofA Global Research [222294].

The VIX—Wall Street’s so-called “fear gauge”—has dropped to its lowest level of 2026, signaling that investors are growing complacent [221563]. But strategists warn that this calm is unlikely to hold, especially with a season of historically turbulent market activity just ahead [221563]. Low readings have often preceded sudden market shocks [221563].

Tangen’s warning serves as a reminder that even the most powerful investors are watching for cracks in the AI boom. The question is not whether the market will correct, but when—and how deep the fall will be [222560].