Citadel founder Ken Griffin delivered a stark message to global leaders at the World Economic Forum on Wednesday, identifying unchecked sovereign debt—not private market speculation—as the single greatest threat to financial stability in 2026.
A Crisis Of Public Expenditure
Speaking on a CNBC panel alongside BlackRock Inc. (NYSE:BLK) CEO Larry Fink and ECB President Christine Lagarde, Griffin rejected historical comparisons to the private sector excess that triggered the Great Depression.
Instead, he pointed the finger squarely at the public sector, citing the skyrocketing U.S. debt, which currently stands at $38 trillion.
“The area of recklessness is the spending of governments around the world who are all… spending well beyond their means,” Griffin said. He argued that while the 1920s were defined by private capital risks, the current era is defined by the “recklessness of government spending.”
Lagarde echoed these concerns, warning against “fiscal dependency” on central banks. She argued that while debt used for productive investment is manageable, borrowing without a clear plan for sustainable growth risks a “dislocation of society.”
Official figures from the U.S. Treasury underscore the scale of this liability: as of Jan. 20, the total national debt stands at approximately $38,485 billion. This sum is comprised of $30,824 billion in debt held by the public and $7,660 billion in intragovernmental holdings.
AI: Economic Savior Or Hype?
The panel debated whether the productivity boom promised by artificial intelligence (AI) could generate enough growth to offset rising deficits.
Griffin expressed skepticism toward the prevailing hope in Washington that AI would automatically solve fiscal irresponsibility.
“The world needs a savior and the hope is that AI is the savior… It may or may not be,” Griffin cautioned.
He noted that while the industry requires a “tremendous amount of hype” to fund massive infrastructure costs, the actual economic deliverance remains uncertain.
Larry Fink added that for Western economies to succeed, they must cooperate to achieve the necessary scale, warning that without it, “China wins.”
The Tariff Threat
Beyond debt, the discussion turned to the resurgence of protectionism. Griffin warned that new tariff regimes often hurt the very consumers they aim to protect and breed “cronyism,” where political connections outweigh business merit.
Lagarde added that this “fragmentation of geopolitics” threatens the cross-border cooperation essential for scaling AI technologies, potentially stalling the very innovation economies are banking on for recovery.
Here are a few AI-linked ETFs for investors to consider.
| ETF Name | 6-Month Performance | YTD Performance | One Year Performance |
| iShares US Technology ETF (NYSE:IYW) | 11.13% | -1.36% | 18.88% |
| Fidelity MSCI Information Technology Index ETF (NYSE:FTEC) | 10.45% | -0.98% | 16.27% |
| First Trust Dow Jones Internet Index Fund (NYSE:FDN) | -4.51% | -3.25% | 0.26% |
| iShares Expanded Tech Sector ETF (NYSE:IGM) | 12.74% | -0.65% | 20.07% |
| iShares Global Tech ETF (NYSE:IXN) | 12.19% | -0.14% | 20.71% |
| Defiance Quantum ETF (NASDAQ:QTUM) | 25.65% | 4.92% | 38.31% |
| Roundhill Magnificent Seven ETF (BATS:MAGS) | 10.89% | -2.62% | 12.76% |
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Imagn
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