Dalio Issues Another Warning: AI Is a "Classic Bubble," and the Bursting Point Is "Very Close"

Bridgewater founder Ray Dalio has warned that artificial intelligence is a "classic bubble" that is approaching its bursting point due to rising interest rates and the need to convert wealth into cash. Speaking at the Forbes Global CEO Conference in Singapore on Wednesday, Dalio said people are borrowing enormous amounts of debt to fund AI. As interest rates continue to climb, the point at which the bubble begins to burst will arrive. "We're in that cycle where it's before that point, but approaching it," the billionaire said. "I think we're getting very close to that point." His remarks come as tech giants pour hundreds of billions of dollars into AI bets, increasingly relying on debt financing, while market gains concentrate in a handful of stocks. Global bond yields have surged to their highest levels in decades, raising the financing costs for the massive investments needed to build AI infrastructure. Despite this, equity valuations continue to climb, with optimism over tech earnings driving the S&P 500 and Nasdaq 100 to record highs this week. Dalio, who has long warned of an AI bubble, said there are other factors that could trigger a bursting, including wealth taxes and other measures to convert unrealized gains into cash. "Everybody says 'I'm worth $1 billion,' but okay, try spending it," he added. "To spend it, you have to sell wealth for money and that's usually where the bubble gets pricked."