AI TRENDS | Ray Dalio Says AI Is in a Bubble

Bridgewater founder Ray Dalio said on Wednesday that the current AI boom follows the same historical pattern as past technology bubbles. According to Sina Finance, he said, "We are now in a bubble," while adding that the underlying innovation still has real transformative significance. Dalio wrote on X that nearly every technology boom creates a bubble that eventually bursts, citing the railroad boom and the Industrial Revolution as past examples. He said the late 1920s saw electricity, refrigeration, telephones, radio, airplanes, and automobiles emerge almost at the same time, which naturally drew large numbers of investors. Dalio said the danger is that people cannot distinguish between the miracle of the technology itself and the related investment. He explained that a technology may indeed be transformative, but if the related stocks are too expensive or are bought with borrowed money, a crash can follow. He said this mechanism was what led to the market slump from 1929 to 1933. Dalio said AI is now showing the same pattern. He added that the technology will likely prove valuable, but investors still need to assess who the real beneficiaries are, whether AI can generate real returns, and whether current stock prices reflect excessive optimism.