Topline
Hedge fund billionaire Ray Dalio said the artificial intelligence bubble is nearing the point where it may burst as interest rates rise and technology companies borrow heavily to fund the AI infrastructure build out.
NEW YORK, NEW YORK – JUNE 03: Ray Dalio speaks during the 2026 Forbes Iconoclast Summit on June 03, 2026 in New York City. (Photo by Taylor Hill/Getty Images)
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Key Facts
Speaking at the Forbes Global CEO Conference in Singapore on Wednesday, Dalio cautioned that the “we’re in the part of the cycle that is before that but approaching that,” referring to the point where the AI bubble could burst.
Dalio said climbing interest rates and the heightened debt companies are taking out to fund AI could push the “classic bubble” to its breaking point.
He also warned that other factors like a wealth tax and attempts to convert paper profits into tax could pop the bubble, arguing that “everybody says ‘I’m worth a billion dollars’ but ok, try to spend that.”
His comments come as global bond yields hit their highest point in decades, with the U.S. 10-year Treasury yield reaching its highest level since 2002, hiking borrowing costs.
Tech companies’ massive spending on AI infrastructure has been increasingly raising investor concerns as many fear the revenue won’t justify the massive investment, though optimism surrounding key tech companies has pushed the S&P 500 and Nasdaq 100 up.
FORBES VALUATION
Dalio is the founder of Bridgewater Associates, the world’s largest hedge fund, and has a net worth of $18.9 billion, making him the #145th richest person in the world as of 10:30 a.m. on Wednesday, according to Forbes’ Real-Time Billionaires list.
KEY BACKGROUND
This isn’t the first time Dalio has warned about the AI bubble. In June, he cautioned that the AI market showed signs of a bubble that could eventually pop, saying that “all great technology changes produce bubbles,” and people end up either spending a ton of money to capture their market share or not enough and lose it. He said the bubbles pop when people go to capitalize on their investments, saying that the “pricking is the converting of wealth into money.”
CRUCIAL QUOTE
“In order to spend that you have to sell wealth in order to get money—and so the bubble usually pricks at that,” Dalio said at the Forbes Global CEO Conference in Singapore.
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