Ray Dalio on the AI Bubble

Ray Dalio, the founder of Bridgewater Associates and a billionaire hedge fund, has described the artificial intelligence (AI) industry boom as "definitely in a bubble." In November 2025, Dalio remarked on CNBC's "Squawk Box" that the high levels of euphoria and quick price gains in AI-related stocks are reminiscent of previous market bubbles. He did, however, warn investors against selling their assets quickly due to the bubble.

While AI investments have driven stock prices to unsupportable heights, Dalio clarified that the timing of a "bubble burst" depends on what causes it—typically, a catalyst like tighter monetary policy, which he thinks is unlikely in the current climate. He stressed that because of the inflationary conditions, investors should anticipate lower returns over the next ten years, but he advised them to hold onto their investments until a clear selling trigger materialises. He mentioned gold as a secure investment and suggested diversifying holdings. Dalio also pointed out that bubbles usually come to an end when investors must sell assets for cash, but that time hasn't come yet.

Dalio's nuanced advise is to be cautious but not panic-sell, understanding that although particular AI investment segments may be overpriced, the technology's wider transformative potential may still provide value over time. His perspective strikes a balance between acknowledging the speculative frenzy surrounding AI stocks and the continued promise of technology innovation for productivity and economic growth.