Ray Dalio warns AI investment bubble may burst as rates climb

At the Forbes Global CEO Conference in Singapore, Ray Dalio warned that the surge in artificial-intelligence investment resembles a classic bubble that is nearing its breaking point. He explained that technology giants are borrowing heavily to finance AI development, and the recent surge in global bond yields is making that debt more expensive. Dalio said the combination of rising interest rates, concentrated market gains, and pressures such as wealth taxes could force investors to liquidate assets, potentially bursting the bubble.

He highlighted that converting unrealized wealth into cash is a common catalyst for such corrections. The comments arrive while AI spending by major firms climbs into the hundreds of billions and equity valuations for indexes like the S&P 500 and Nasdaq 100 hit record highs. Dalio’s remarks underscore the financial risks tied to the rapid expansion of AI infrastructure.