(Feb 27): Norway’s sovereign wealth fund said that since it started using artificial intelligence (AI) to help manage its portfolio, it’s been impressed by the technology’s ability to catch risks overlooked by both the media and external vendors.
The investor, whose US$2.2 trillion portfolio makes it the world’s biggest wealth fund, has been an outspoken advocate of integrating AI into its processes, with chief executive officer Nicolai Tangen making his enthusiasm clear early on. On Thursday, the fund provided an update on its responsible investing strategy, which included a nod to the impact of AI.
“Within 24 hours of our investment, the AI tools flag new companies in the fund’s equity portfolio with potential links to, for example, forced labour, corruption or fraud,” the fund said. “Often, this information has not been captured in international media coverage or data vendor alerts.”
Once the AI analysis is done, “we always review the information before we make an investment or risk decision,” the fund said. “In multiple instances, we identified and sold these investments before the broader market reacted to the risks, avoiding potential losses.”
Norges Bank Investment Management says it is alert to the risks of holding companies whose products can be used in military conflicts, noting that its models are being honed to catch unacceptable exposures.
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Tangen, a former hedge fund manager, said last year he’s been running around “like a maniac” trying to get staff to use the technology, even going so far as to say that employees shunning AI “will never be promoted.” The fund has said it wants to use AI to improve decision making, and to strengthen investment processes across teams, ultimately helping it identify corporate winners and losers.
The fund is “increasingly finding new use cases for AI across our portfolio risk management,” a spokesperson said before Thursday’s report was released. “We are exploring ways to use AI to strengthen our attribution analysis for explaining changes in the fund’s financed emissions. But we have not applied it to climate scenario analysis yet.”
All employees at the fund now use AI tools including Anthropic’s Claude, among others, a spokesperson said on Thursday. The fund doesn’t have plans to cut the number of staff, the person added.
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NBIM also used Thursday’s report to note that a decision to exclude weapons manufacturers and tobacco companies due to ethical guidelines is hurting its returns.
“These product-based exclusions have reduced the cumulative return on the equity benchmark index by around 3.51 percentage points, or 0.04 percentage point annually,” Norges Bank Investment Management (NBIM), as the fund is officially known, said in the report.
Defence stocks have soared in recent years as a new world order shaped by geopolitical conflicts and outright war trigger an historic wave of demand for weapons. An MSCI index tracking arms manufacturers surged 75% last year, trouncing the roughly 20% gain in the MSCI World Index. Norway’s wealth fund is due to publish its 2025 results on Friday.
The ethical guidelines that the Oslo-based fund is expected to follow became the focus of intense controversy last year, after its divestment policy led to tensions with the Trump administration. Norway has since launched a review of the framework guiding such exclusions, shelving the role of the Ethics Council as part of that process.
The fund says it is alert to the risks of holding companies whose products can be used in military conflicts, noting that its models are being honed to catch unacceptable exposures.
“In 2025, we continued to strengthen our framework to better identify, assess and follow-up on portfolio companies’ exposure to conflict-affected and high-risk areas,” the fund said on Thursday.
Founded in the early 1990s, NBIM invests in line with a benchmark index set by Norway’s finance ministry and its scope for active moves is limited. Its portfolio spans equities, fixed income, real estate, and renewable infrastructure, all outside Norway.
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