Billionaire Ray Dalio says we’re nearing point where AI bubble may burst
Speaking at the Forbes Global CEO Conference in Singapore on Wednesday, Dalio said that a huge amount of debt is being taken out to fund AI. As rates continue to climb, that is a point at which the bubble begins to pop.
Billionaire Ray Dalio has warned that artificial intelligence is nearing a dangerous bubble that could burst. Speaking at the Forbes Global CEO Conference in Singapore, Dalio noted that a significant amount of debt is being taken out to fund AI. With interest rates climbing, this is a point where the bubble may begin to pop, according to Dalio. "We're in the part of the cycle that is before that but approaching that. I think we're close to that," he said.
Dalio's comments come as technology giants pour hundreds of billions of dollars into AI, often financed through debt. Bond yields have surged to the highest levels in decades, making it increasingly expensive to fund the massive investments required for AI infrastructure.
Despite this, equity valuations continue to rise, with optimism over technology earnings driving the S&P 500 and Nasdaq 100 indexes to record highs this week. However, Dalio warns that there are other factors that could trigger the collapse of the AI bubble. These include wealth taxes and efforts to convert unrealized gains into cash.
"Everybody says 'I'm worth a billion dollars' but OK, try to spend that," Dalio noted. "In order to spend that you have to sell wealth in order to get money — and so the bubble usually pricks at that."
Written by urgent.news from Economic Times Tech's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
