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

The head of Norway’s sovereign wealth fund—the largest in the world—has issued a stark warning: the rapid rise in stock prices fueled by artificial intelligence may be a bubble that is about to burst. Nicolai Tangen, CEO of Norges Bank Investment Management, said that soaring valuations in AI-related companies could trigger a sharp market correction. He cautioned that investors may be overestimating the short-term profits of AI, comparing the current excitement to past technology bubbles. The fund, which owns roughly 1.5% of all listed companies globally, is directly exposed to this risk. Because it invests heavily in U.S. tech giants—many of which are leading the AI charge—a sudden drop in their stock prices would hit the fund’s value hard. Tangen did not predict a specific timeline for a downturn, but he stressed that the gap between current prices and underlying business performance is "concerning." He urged investors to remain cautious, noting that markets are "pricing in perfection" for AI. While the fund remains a long-term investor, the warning serves as a reminder that even the world’s most stable financial institutions see danger in the current AI frenzy.