Ray Dalio warns: The AI bubble is close to bursting
American investor Ray Dalio warns that the artificial intelligence bubble is close to bursting due to high interest rates and the need to convert capital into cash. Dalio said at a Forbes conference in Singapore that massive loans are being taken to finance AI, and as interest rates rise, the bubble begins to burst. Meanwhile, stock markets continue to rise to new highs.
American investor Ray Dalio, founder of hedge fund Bridgewater Associates, warns that the artificial intelligence bubble is close to bursting. In a speech at a Forbes conference in Singapore, Dalio described AI as a 'classic bubble' financed through massive loans. According to him, as interest rates continue to rise, a stage is reached where the bubble begins to burst. His remarks referred to tech giants spending hundreds of billions of dollars on AI and financing it through debt. Meanwhile, bond yields around the world have surged to their highest levels in decades, raising financing costs. However, stock markets continue to rise to new highs amid optimism about tech company profits. Dalio noted several factors that could lead to the bubble bursting, including a wealth tax and attempts to convert unrealized profits into cash. Arthur Hayes, former CEO of BitMEX, was also quoted in the same context, arguing that extensive investments in AI will result in a crash and bailout, noting that there is always overinvestment, a crash, and a bailout in every technological breakthrough.