Watch Out for These 3 Possible Bubbles in Global Economy, Warns WEF Chief
Governments have not been so heavily indebted since 1945, he added.
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[Image source: Chetan Jha/MITSMR Middle East]
Amid a global tech stock sell-off, the World Economic Forum chief has warned of three potential bubbles in financial markets, including one driven by artificial intelligence.
“We could possibly see bubbles moving forward. One is a crypto bubble, the second an AI bubble, and the third would be a debt bubble,” said Borge Brende, president, WEF, during a visit to Brazil’s São Paolo.
The comment came as global technology stocks saw a sharp fall, followed by a global sell-off in chip stock that wiped out $500B in market value.
AI has been bullish in the eleven months this year, riding high on multiple partnerships signed, funding raised, and a global government push. Global venture funding in the third quarter increased 38% year-over-year to $97 billion.
As a part of the package, data centers have been gaining sharp momentum worldwide.
Meanwhile, the volatile asset class has seen explosive growth with bitcoin climbing from $94,443.52 in January to $103,193 currently. The growth also led to a crypto market capitalization of $3.523T.
Governments have not been so heavily indebted since 1945, Brende added. This global debt bubble is not due to a sudden price spike (like in tech stocks), but is a structural vulnerability that has been building for decades, now strained by high interest rates.
H1 2025 saw over $21 trillion be added to global debt, marking a new record annual high of $338 trillion.
“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,” Brende said.
In recent times, major companies, such as Amazon, IBM, Intel, Microsoft, and Nestlé, have announced massive job cuts. According to the latest report by Challenger, Gray & Christmas, with 150,000 jobs, October 2025 saw the biggest reduction for the month in over 20 years for the US.
“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 added, stating that only then can people be paid better and have more prosperity in society.
