Norway Wealth Fund Warns AI Bubble Could Wipe €432 Billion From $2.4 Trillion Portfolio
Updated
Updated · DW (English) · Aug 17
Norway Wealth Fund Warns AI Bubble Could Wipe €432 Billion From $2.4 Trillion Portfolio
3 articles · Updated · DW (English) · Aug 17
Summary
Nicolai Tangen said an extreme AI-led market collapse is "not completely improbable" for Norway’s $2.4 trillion wealth fund, whose managers estimate a correction could cut total value by 18%.
€432 billion could be erased because technology makes up roughly one-third of the fund’s stock holdings, and soaring AI-chip valuations helped drive its record 1,753 billion-kroner first-half profit.
Norway’s benchmark-driven strategy leaves little room to hedge aggressively: the fund is invested about 70% in equities and 30% in bonds, and its government mandate limits large cash positions or major defensive bets.
More than $1 trillion of expected AI infrastructure spending has kept many investors invested despite valuation fears, even as the BIS warned in June that AI exuberance could end in a bust.
The risk matters beyond markets because the fund finances about a quarter of Norway’s budget, though continued North Sea oil and gas inflows are projected to add about €63 billion in 2026.