Norway Wealth Fund Warns of AI-Driven Stock Bubble

Oslo – Norges Bank Investment Management, which oversees the world’s largest sovereign wealth fund, warned on Thursday that the rapid rise in AI‑driven stock valuations could precipitate a sharp market correction. Fund manager Nicolai Tangen said the surge in price‑to‑earnings multiples for companies positioned in artificial‑intelligence technologies “is reaching levels that are not supported by fundamentals,” and that a sudden shift in sentiment could affect the fund’s overall performance.

The fund, valued at roughly $1.4 trillion, holds about 70 % of its assets in equities, with a significant share allocated to U.S. technology firms that are central to the AI boom. While the portfolio’s exposure to any single sector is capped at 5 % under its internal risk limits, the cumulative weighting of AI‑related stocks has risen to around 8 % of the equity allocation. Tangen emphasized that the fund’s diversified, long‑term approach and strict risk‑management framework are designed to absorb market volatility, but he cautioned that a broad correction could still impact returns and trigger a reassessment of future allocations.