NEW YORK — Ray Dalio, founder of Bridgewater Associates, has sounded the alarm on what he describes as a bubble forming in artificial intelligence (AI) investments, while cautioning that investors shouldn’t rush to sell their stocks.
Speaking Thursday on CNBC, Dalio said, “Don’t sell just because there’s a bubble.” He added, “But if you look at correlations with 10-year returns, when you’re in that zone, you’re likely to see very low returns.”
His remarks come amid volatile moves in the AI sector. Nvidia, a leading AI company, surged more than 5% earlier in the day following earnings and guidance that exceeded expectations, only to close the session down 3.15% as concerns about AI stock valuations resurfaced.
Dalio emphasized that while the bubble is evident, it needs a solution. The billionaire investor noted that a monetary policy tightening is unlikely to address the issue; instead, wealth taxes or other measures could play a role.
“The picture is very clear,” Dalio concluded. “We are in bubble territory. But we haven’t felt the pinch of the bubble yet.”
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