The World Economic Forum’s president, Børge Brende, has raised the alarm on three potentially dangerous financial bubbles that could reshape global markets in the coming months.
Speaking in Brazil’s financial hub São Paulo this week, Brende warned that crypto assets, artificial intelligence investments, and mounting government debt levels each pose significant risks to economic stability.
The warning comes amid a period of record-breaking valuations that have left many investors nerved, with technology stocks experiencing sharp falls recently even as markets continue touching historic highs.
The WEF chief’s comments reflect growing unease among global financial leaders about whether the current rally rests on solid fundamentals or speculative euphoria that could unwind rapidly.
Breaking down the WEF warning: Three-Part threat
Brende pointed out that the first bubble we need to pay attention to is crypto.
Even with regulators still unsure how to handle digital assets, money is pouring in at breakneck speed, and that kind of hype has a history of ending badly.
The second bubble, he said, is forming around artificial intelligence. About $500 billion is flowing into AI every year, driving valuations to a point that’s starting to look a lot like the dot-com bubble.
Yes, AI is real and powerful, but the frenzy around it could be getting ahead of reality.
But it’s the third bubble that really worries him: debt. Governments around the world are now more indebted than at any time since 1945.
That creates a fragile situation, one sharp shock, one recession, or even a shift in interest rates, and things could get messy fast.
To be clear, Brende isn’t dismissing AI’s potential. He actually believes it could boost productivity by around 10% in the next decade. The problem is the human cost.
We are already seeing white-collar layoffs at companies like Amazon and Nestlé, and he warns that more could follow as automation accelerates.
Meanwhile, global debt has surged to about 25% higher than pre-pandemic levels, which were already historically high.
With debt this inflated, there’s much less room for error, crisis response, or rising borrowing costs.
What analysts are saying
The financial community is split on whether these represent genuine bubbles or healthy market corrections.
Ray Dalio, founder of Bridgewater Associates, largely agrees with Brende’s assessment, warning that significant bubble-like activity surrounds large-cap technology stocks driven by AI enthusiasm.
IMF Managing Director Kristalina Georgieva drew parallels to the dot-com bubble, noting that today’s valuations are approaching those seen 25 years ago when the internet obsession peaked.
However, some analysts offer counterarguments worth considering.
Research from Crunchbase suggests the situation resembles a “risk bubble” rather than a traditional valuation bubble, with AI companies showing genuine revenue generation, unlike many dot-com era failures.
Additionally, institutional adoption data paints an optimistic picture: 83% of institutional investors plan increasing crypto exposure in 2025, and 58% of enterprises are actively pursuing AI capabilities, suggesting rational actors are backing these sectors beyond mere speculation.
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