Ray Dalio of Bridgewater: The AI Revolution is Real, but High Valuations and Leverage May Be Creating a New Bubble

BlockBeats News, July 31—Bridgewater founder Ray Dalio stated that AI possesses revolutionary value in transforming production methods, but the current market is also showing characteristics consistent with historical bubble patterns. Investors may overlook the gap between technological value and market prices. When asset valuations far exceed actual earning capacity and encounter tighter financial conditions, bubble risks may quickly emerge. Dalio pointed out that bubble bursts are often amplified through debt chains. Declining asset prices reduce collateral value, forcing highly leveraged investors to sell assets to repay debts, further driving prices downward. If inflation rises again and prompts central banks to increase interest rates, higher financing costs could exacerbate market repricing. He believes the global economy is currently in a long-term "big cycle" characterized by debt accumulation, widening wealth gaps, political divisions, and shifts in international power dynamics. Investors should avoid concentrating wealth in a single asset and reduce risks through diversified allocations across stocks, cash, gold, bonds, and real estate. Among these, gold, as a hard asset that cannot be created, can serve as a risk diversification tool during periods of currency devaluation and rising financial stress. Regarding the labor market, Dalio believes AI will replace some repetitive intellectual tasks, and those who can collaborate with AI and continuously adapt to changes will have a competitive edge in the future. He emphasized that even if the economy experiences a recession, technological progress will not stop.