Ray Dalio Says AI Bubble Resembles Dot-Com Era and Will Eventually Burst

Bridgewater Associates founder Ray Dalio said the artificial intelligence bubble will eventually burst.

In an interview with Bloomberg on June 3, Dalio said the AI industry is showing typical signs of a bubble, citing excessive speculation and lofty valuations.

He said the current AI boom resembles the dot-com bubble of 2000. But a collapse would not negate the technology's long-term value. Most AI companies may struggle to survive, while the underlying technology will continue to change the world, he added.

Dalio said investors do not need to rush for the exits. Still, he advised them to watch for catalysts that could puncture the bubble, including monetary tightening by the Federal Reserve.