WEF President Warns of Potential Bubbles in Cryptocurrency, AI, and Sovereign Debt

During a visit to São Paulo on November 5, 2025, Børge Brende, President of the World Economic Forum (WEF), highlighted the emergence of potential financial bubbles in cryptocurrency, artificial intelligence (AI), and sovereign debt. He urged global leaders to exercise caution in these rapidly evolving sectors.

Brende's remarks come at a time when global debt has reached unprecedented levels. According to the Institute of International Finance (IIF), global debt surged by over $21 trillion in the first half of 2025, reaching a record $337.7 trillion by the end of the second quarter. This increase was driven by looser global financial conditions, a weakened U.S. dollar, and more accommodative monetary policies from major central banks. Countries including China, the United States, France, Germany, Britain, and Japan saw the largest rises in debt levels.

Brende expressed concern over the sustainability of such high debt levels, noting that global government debt has reached its highest point since 1945. He emphasized the need for prudent fiscal policies to prevent potential economic instability.

In addition to sovereign debt, Brende pointed to the rapid growth and investment in AI technologies as a potential bubble. While acknowledging the significant productivity gains offered by AI, he warned of the risk of overvaluation and a possible market correction. Brende also highlighted the impact of AI on employment, particularly in white-collar sectors. He cited recent workforce reductions by companies like Amazon and Nestlé as evidence of this trend.

The cryptocurrency market was another area of concern for Brende. He noted the market's significant volatility and the potential for speculative investments to lead to a bubble. Brende emphasized the need for regulation and oversight to mitigate risks associated with cryptocurrencies.

The implications of these potential bubbles are far-reaching. If they were to burst, the global economy could face significant challenges, including financial instability and job losses. Brende called for international cooperation and responsible investment strategies to address these risks.

In conclusion, Brende's warnings serve as a reminder of the importance of vigilance and proactive measures in managing emerging financial risks. As the global economy continues to evolve, policymakers, investors, and the public must remain attentive to potential bubbles and work collaboratively to ensure economic stability.