Tangen: AI drives fund productivity, raises concentration risk

Nicolai Tangen, CEO of Norges Bank Investment Management, highlighted artificial intelligence as the most significant global development.

He detailed the fund's internal adoption of AI, noting that all 680 employees use it daily, with over half using coding tools.

This integration has already achieved a productivity gain exceeding 20 percent, not by replacing staff but by enhancing their capabilities, allowing portfolio managers to analyze more data and legal staff to process cases faster.

Furthermore, AI contributed significantly to a 30 percent reduction in trading costs between 2023 and 2025, saving NOK 4.8 billion.

This effective use is underpinned by a long-standing cloud-based IT platform established in 2018 and years of data structuring.

Tangen also acknowledged the cybersecurity risks associated with AI, stressing the continuous effort to strengthen defenses in a rapidly evolving technological race.

AI has significantly impacted the fund's investments, contributing to substantial returns.

Over the past five years, the fund earned NOK 1,614 billion from the seven largest US technology companies.

This, combined with optimism around AI, boosted the fund's market value by 15 percent in 2025, exceeding NOK 21,000 billion.

However, this success has created a notable concentration risk: the 10 largest companies, seven of which are US tech firms, now represent 21.3 percent of the fund's equity investments – an unprecedented level that may continue to grow.

While 2025 saw strong performance, the fund recorded a negative relative return for the third consecutive year, largely due to underperforming real estate investments.