World leaders are worried about trade wars now — and AI soon

Trade wars and the possible downsides of AI are among the gravest threats facing global businesses over the coming years, according to experts surveyed ahead of the Davos summit next week.

About 1,300 business chiefs, academics, and civil society leaders polled by the World Economic Forum (WEF) picked “geoeconomic confrontation” as their biggest worry over the next two years. It will be the first time the world's business elites have gathered in Davos for the closely watched annual summit since President Donald Trump unleashed a barrage of tariffs in 2025.

Trade wars were cited by 18% of respondents, while “state-based armed conflict” was the second most-common risk at 14%, with Russia’s years-long war against Ukraine still raging. The survey conducted between Aug. 12 and Sept. 22, before Trump’s attack on Venezuela and his fresh threats to take over Greenland. 

Half of those polled said they expect turbulence in the next two years, with WEF's report describing the world as “sitting on a precipice.” Just 1% said they expect calm over the same period. Concerns over about an economic downturn, inflation, and bursting asset bubbles all rose compared to last year’s report.

“We are witnessing the turmoil caused by kinetic wars, the deployment of economic weapons for strategic advantage, and growing fragmentation across societies,” WEF managing director Saadia Zahidi wrote. “And as these ‘here and now’ risks unfold, longer-term challenges, from technological acceleration to environmental decline, continue to create knock-on effects across systems. In parallel, rules and institutions that have long underpinned stability are increasingly deadlocked or ineffective in managing this turbulence.”

Risks linked to AI have also fast climbed up the agenda, with experts warning that the technology could create serious economic and social disruption if left unchecked. The WEF said concerns about AI’s potential downsides have risen faster than any other risk in its survey, driven by fears of widespread job losses, rising inequality, and deeper social divisions. 

The report added that the pace of AI development could outstrip regulation and oversight, increasing the risk of economic shocks and unintended consequences as the technology becomes more powerful and more widely used. Adverse outcomes of AI moved from 30th place among short-term risks last year to fifth place among long-term risks this time around. 

Environmental risks have fallen down the list of short-term concerns for business leaders. The WEF said threats such as extreme weather and pollution still rank among the top global risks over the next two years, even if they are no longer seen as the most urgent challenges.

Over the longer term, however, climate threats still dominated the outlook. Extreme weather, biodiversity loss, and critical changes to Earth’s systems are viewed as the most severe risks over the next decade, with the report warning that climate-related shocks are likely to become more frequent and more disruptive for economies and businesses.