Oslo: Norway's sovereign wealth fund, the world's largest with assets of about $2 trillion, could eventually lose its entire value, its managing director warned Tuesday. Nicolai Tangen expressed concern over the risks facing the global economy and financial markets, suggesting that the prospect of the fund disappearing is "not totally improbable."

According to Anadolu Agency, Tangen discussed these risks during a speech in southern Norway, emphasizing that the fund's future is uncertain given the volatile global environment. Established in 1996, the fund was designed to invest Norway's oil and gas revenues for the benefit of future generations. Despite doubling in value in less than a decade and surpassing $1 trillion in 2017, the fund's growth trajectory is not guaranteed to continue indefinitely.

Tangen cautioned that no country in history has managed to maintain such substantial wealth over an extended period. He drew parallels with historical examples from Spain and the UK, where significant fortunes eventually dissipated. The fund, which invests globally in stocks, bonds, and real estate, currently finances about a quarter of Norway's public spending, a significant increase from around 10% a decade ago.

Tangen underscored several extreme scenarios that could threaten the fund's value, including nuclear war and acts of biological terrorism. He also highlighted the possibility of a prolonged economic depression triggered by factors such as the bursting of an "AI bubble" and escalating trade tensions between the US and China. With investors placing high valuations on companies linked to artificial intelligence, a severe downturn could mirror the Great Depression of 1929, potentially wiping out "at least 80%" of the value of stock market investments, even with today's safeguards in place.