The head of the World Economic Forum (WEF), Børge Brende, has warned that the world could be heading toward three major financial bubbles — in cryptocurrency, artificial intelligence (AI), and debt — as markets experience sharp declines in global technology stocks after months of record highs.
Speaking to reporters in São Paulo, Brazil’s financial hub, Brende said that while markets have been buoyed by optimism over AI’s transformative potential, there are growing concerns that valuations across sectors — particularly in tech — have become inflated.
“We could possibly see bubbles moving forward. One is a crypto bubble, second an AI bubble, and the third would be a debt bubble,” he said.
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Brende’s warning comes as the global economy faces multiple pressures of high interest rates, persistent inflation, trade frictions, and mounting sovereign debt.
“Governments have not been so heavily indebted since 1945,” he noted, referring to the post-World War II era, when most industrialized nations were rebuilding their economies through borrowing.
However, investors have continued to pour billions of dollars into crypto and AI-related stocks, pushing markets to unprecedented highs. The rally has been driven by expectations that artificial intelligence will revolutionize industries ranging from finance and healthcare to transportation and manufacturing. Companies like Nvidia, Microsoft, and OpenAI have led the surge, with Nvidia crossing a $4 trillion market valuation last month on the back of soaring demand for AI chips.
Analysts and market strategists are beginning to echo Brende’s concerns. They say the scale of speculative investment in AI-related equities and digital assets resembles earlier financial bubbles — such as the dot-com boom of the late 1990s and the cryptocurrency frenzy of 2021. It is believed that the recent pullback in tech shares is not necessarily a cause for panic, but it’s a clear signal that the market was running ahead of fundamentals.
Valuations in some AI-linked companies are believed to have reached “unsustainable” levels.
Global stock indices have dipped from their peaks, led by sell-offs in tech-heavy benchmarks. Yet, many investors remain optimistic, arguing that AI’s long-term benefits justify short-term volatility.
Brende acknowledged that AI carries immense potential to drive productivity and growth, but cautioned that it could also disrupt labor markets and deepen inequality if not managed responsibly.
“AI offers the possibility of big productivity gains but could also threaten many white-collar jobs,” he said.
“What you could — worst case — see is that there is a ‘Rust Belt’ in those big cities that have a lot of back offices with white-collar workers that can more easily be replaced by this AI and increased productivity.”
His warning aligns with concerns voiced by executives and labor experts over the past year. Companies such as Amazon and UPS have announced significant layoffs in administrative and support functions, citing increased automation and digital transformation. In the U.S., labor economists estimate that as many as 30% of white-collar roles could be affected by AI automation within the next decade, especially in sectors such as finance, law, and customer service.
Still, Brende emphasized that technological advancement has historically led to overall economic progress, despite short-term disruption.
“We also know from history that technological changes over time lead to increased productivity, and productivity is the only way over time to increase prosperity,” he said. “Then you can pay people better salaries, and you have more prosperity in society.”
The WEF, known for its annual summit in Davos, Switzerland, where global leaders and corporate executives gather to discuss economic and social trends, has made AI a central focus of its recent agenda. The organization has been calling for international cooperation to establish ethical frameworks for AI development and to mitigate risks related to labor displacement, data privacy, and systemic financial instability.
Brende’s remarks also coincide with a wave of regulatory scrutiny over both AI and digital assets. In Washington and Brussels, lawmakers are pushing for tighter oversight of AI companies to ensure transparency, accountability, and fairness in deployment. Meanwhile, global financial watchdogs — including the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) — have warned that unchecked speculation in cryptocurrencies and sovereign debt could trigger global financial instability.