Norway’s sovereign wealth fund, the world’s largest asset manager, has become embroiled in an escalating conflict between CEO Nicolai Tangen and Elon Musk, after recently released text messages revealed a heated exchange over Tesla’s pay package. While the fund has posted record profits, it continues to face underperformance compared to the US-driven tech boom.
Norges Bank Investment Management (NBIM), which manages the GPFG pension fund for Norwegian civil servants, reported a profit of NOK 2.5 trillion (approximately €200 billion) for 2024 on Wednesday, driven by a global tech rally fuelled by artificial intelligence.
In a wide-ranging press conference in Oslo on Wednesday, Tangen acknowledged that the fund had underperformed its benchmark by 45 basis points last year, partly due to an underweight position in the largest US tech companies.
“We are now seeing a situation where the top 10 holdings in our equity portfolio account for almost 20 percent of the total,” Tangen said. “These are massive companies, many of which are now larger than entire countries in our portfolio.”
The rise of AI-driven tech giants like Nvidia, Apple and Microsoft has been a major driver of the fund’s strong returns in recent years. However, Tangen warned that this concentration risk is something NBIM is closely monitoring.
“We have to live with higher concentration risks than we had in the past,” Tangen said. “The fact that you are large means that you would get even larger. It’s a winner-takes-all situation that we’re seeing across many industries.”
AI: ‘Not sure if it’s a bubble’
Tangen’s comments came amid renewed debate over NBIM’s exposure to concentrated US market risks, particularly after the unveiling of an open-source model by the Chinese AI firm DeepSeek, which triggered a sell-off in Nvidia. “Everybody thought China was two years behind,” Tangen remarked.
The rapid rise of DeepSeek has intensified concerns about the unpredictable pace of AI innovation, raising worries about market valuations. “It’s pricey, but I’m not sure it’s a bubble,” Tangen stated. “The development is positive for the democratisation of AI.”
Row with Musk
The press conference also touched on NBIM’s approach to corporate governance, with Tangen addressing recent controversies around communications with Tesla CEO Elon Musk. While Tangen acknowledged the “big mess” caused by the leaked messages, he emphasized that the fund maintains a strict policy of not engaging directly with company executives on issues like executive compensation.
However, the conflict between Tangen and Musk is not related to the fund’s performance but rather concerns Tesla’s pay package. NBIM, which held a 1.1% stake in Tesla at the end of 2024, was one of the investors who voted against Musk’s pay proposal last year, which was initially valued at over $50 billion but is now estimated to be worth $100 billion due to Tesla’s soaring stock price. This stance clearly angered the billionaire. The proposal will be up for discussion again this year.
Under Norway’s Freedom of Information Act, text messages between Tangen and Musk were made public, revealing a heated exchange on corporate governance, executive pay, and the broader implications for corporate America. Tangen is said to have responded sharply, emphasising NBIM’s responsibility to Norwegian pensioners.
Musk asked for a favour
According to Norwegian business newspaper E24, Musk attempted to pressure Tangen into doing him a favour and approving his pay package. “When I ask you for a favour, which I very rarely do, and you refuse, then you shouldn’t expect me to ask you for anything until you’ve made up your mind,” Musk wrote to Tangen in October. “Friends are as friends do,” Musk added.
Musk later declined an invitation to speak at NBIM’s investment conference. Norwegian media reported on this rejection after being informed by the firm under Norway’s transparency laws. Musk responded to media coverage with the question: “Did you leak my text messages to the press?” Musk asked Tangen and accused him of “political ambitions” and “using the oil fund to promote himself.”
The dispute adds another layer to Musk’s growing tensions with institutional investors, who have increasingly questioned Tesla’s governance, especially given Musk’s divided attention between Tesla, SpaceX, and X (formerly Twitter). During the press conference, Tangen remained firm in his position, arguing that excessive compensation packages should be more closely tied to performance rather than dominance.
‘Most transparent fund in the world’
Tangen emphasised that NBIM is proud to be “the most transparent fund in the world. Nobody else comes even close.”
Looking ahead, Tangen struck a cautious tone, warning that the fund’s stellar performance may not last forever. NBIM has published stress test scenarios showing the potential for “very, very significant” declines in the fund’s value under certain economic conditions.
“We are a very long-term investor, and we have to be prepared for volatility,” Tangen said. “The world has become more dangerous, and we must be vigilant in managing the risks we face.”
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