Norway’s Sovereign Wealth Fund, the world’s biggest stock market investor, has achieved substantial gains in the first half of the year, totaling $143 billion. These impressive profits have been largely driven by the fund’s enthusiasm for artificial intelligence (AI) and its investment in top US tech stocks.
The $1.4 trillion fund has experienced a return of 10% year to date, with approximately one-third of its recent gains and 12% of its holdings attributed to seven prominent US tech companies. These companies, known as the magnificent seven, include Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. The hype surrounding AI has contributed significantly to the success of these tech giants.
Nicolai Tangen, the CEO of Norway’s Sovereign Wealth Fund, expressed his bullish outlook on AI. He emphasized the vast opportunities presented by this nascent technology, stating that those who fail to recognize its potential are complete morons. Tangen also revealed that the fund is actively engaging with companies in its portfolio to ensure accountability for AI-related matters at the board level.
Acknowledging the complexity of regulating AI, Tangen highlighted the technology’s importance in various races, such as the weapons race, medical race, self-driving race, and financial race, driven by the intense competition between the United States and China. The fund’s chief executive emphasized the need for vigilance in monitoring and managing the fund’s exposure to the tech sector, which represented the largest portion of its equity investments at the end of 2022.
While the fund’s profits have predominantly stemmed from tech stocks, Tangen highlighted that the fund recently reduced its overweight position in top tech companies. These holdings, which accounted for approximately 12% of the fund’s total value, are being actively monitored to mitigate potential risks.
In conclusion, Norway’s Sovereign Wealth Fund has capitalized on the AI wave, generating substantial profits in the first half of the year. Its strategic investments in the magnificent seven US tech stocks, driven by the hype surrounding AI, have contributed significantly to its success. While remaining bullish on AI, the fund’s CEO emphasized the importance of monitoring its exposure to the tech sector and facilitating accountability on AI-related matters within its portfolio companies. As the fund continues to navigate the evolving landscape of AI, it remains committed to driving value while mitigating risks associated with this rapidly evolving technology.