Norway wealth fund chief warns on AI job-cut backlash

The CEO of Norway’s $2.2 trillion sovereign wealth fund has urged companies to adopt artificial intelligence (AI) in a way that benefits society broadly, cautioning against using the technology primarily to cut jobs.

Speaking on Tuesday, Nicolai Tangen warned that layoffs linked to AI adoption could spark a backlash, particularly as companies globally increase the use of automation tools.

The fund, which invests Norway’s oil and gas revenues, is the world’s largest sovereign wealth fund and holds stakes in around 7,200 companies, owning an average of 1.5% of all listed stocks worldwide.

Focus on productivity over cost-cutting

Tangen expressed concern about companies prioritising cost reduction over long-term productivity gains.

“I'm surprised by people who basically use it only to take out costs,” he said in an interview, as cited in a Reuters report.

He added, “Because people are not stupid. They don't particularly want to make themselves unemployed. So it's not an incentive to integrate it.”

He emphasised that AI should be used to strengthen economic output and efficiency rather than eliminate jobs.

The comments come as several large US companies have announced layoffs this year while streamlining operations amid increasing AI adoption.

This has intensified concerns among policymakers about potential job losses and broader economic consequences.

Encouraging wider adoption without backlash

Tangen, who has previously supported AI integration within the fund, reiterated that his organisation is not planning layoffs.

Around half of the fund’s 700 employees are involved in coding their own AI tools.

He argued that companies should instead focus on leveraging AI to expand their market presence.

“Instead, why don't you use it to become more productive and gain market share? You are going to make adoption faster and easier for yourself ... and you are going to make it easier for society so we don't get this total backlash against something that is really, really positive,” he said, as mentioned in a Reuters report.

Europe’s lag in technology adoption

Tangen also highlighted Europe’s challenges in competing with US technology firms.

Despite this, he noted that Europe has strong fundamentals, including a highly educated workforce, digital infrastructure, and access to large datasets.

The fund’s exposure to Europe has declined over time, with investments in the region falling to 24.8% from 39% a decade ago, reflecting slower growth compared to US technology companies.

Calls for reform and diversification

Earlier this year, the fund urged Europe to unify its capital markets and promote competition and innovation.

Meanwhile, concerns have been raised by some Norwegian politicians over the fund’s heavy exposure to the United States, which accounts for more than half of its investments.

Tangen said he would welcome more global service provider options, pointing out the lack of alternatives to US-based firms.

Currently, the fund relies on Amazon’s AWS for cloud services and Citibank as its global custodian.