WEF Chief Warns of Potential AI, Crypto, and Debt Bubbles amid Tech Stock Declines
SAO PAULO: The head of the World Economic Forum (WEF) has warned that the global economy could face three emerging financial bubbles — in artificial intelligence, cryptocurrency, and debt — as markets reel from steep declines in technology stocks.
Speaking to reporters during a visit to Brazil’s financial hub, São Paulo, WEF President Børge Brende said investors and policymakers should be vigilant as market valuations climb to record levels despite persistent economic challenges.
“We could possibly see bubbles moving forward — one is a crypto bubble, second an AI bubble, and the third would be a debt bubble,” Brende said.
He noted that government debt levels have reached their highest point since 1945, raising concerns about long-term fiscal sustainability.
Despite mounting worries over elevated interest rates, stubborn inflation, and global trade tensions, equity markets have continued to surge in recent months, buoyed by optimism that artificial intelligence could transform productivity and economic growth.
Brende acknowledged that AI holds enormous potential for boosting efficiency but warned of social and employment risks, particularly for white-collar workers in large urban centers.
“In a worst-case scenario, you could see a kind of ‘Rust Belt’ emerging in cities with a high concentration of back-office jobs that can easily be replaced by AI,” he said, citing recent layoffs at companies such as Amazon and Nestlé.
Still, he emphasized that technological progress has historically driven productivity and prosperity over time.
“We know from history that technological change ultimately leads to higher productivity — and productivity is the only way to sustainably increase prosperity,” he said. “That allows for better wages and improved living standards across society.”
