Bridgewater's Ray Dalio Warns of AI Bubble Approaching 2000 Levels: Wealth Does Not Equal Money, IPO Mania Key Force Behind Bubble Burst

August 4th. Ray Dalio, founder of Bridgewater Associates, issued the strongest market warning on the "CEO Daily" podcast, stating that the AI ​​frenzy has pushed the market into a bubble similar to 1929 and 2000. When the host mentioned Jeremy Grantham's previous statement that the current situation is the "biggest investment bubble in American history," Dalio directly responded, "He is right."

Dalio used a simple deduction to explain the core contradiction of the bubble mechanism—investors buy $100 worth of shares in an AI company and then use this as collateral to borrow. When the market reverses and everyone needs cash at the same time, the price may collapse to $25, while the debt still needs to be repaid. Dalio emphasized, "Wealth is not the same as money. You see a lot of people become wealthy, but wealth cannot be used for consumption. You have to sell wealth to get money. The current market lacks experience, and the influx of leveraged ETF investors is more like gambling."

Dalio also pointed out that there are usually two forces that burst a bubble—rising interest rates that increase the cost of debt financing and a surge in stock offerings. The latter is already a reality: SpaceX went public in June but saw its stock price plummet, with S&P expecting its free cash flow to remain negative until 2029; Anthropic has secretly filed for an IPO and is expected to debut with a valuation of nearly $1 trillion as early as October; OpenAI has also submitted an application with a valuation target of over $1 trillion.

Dalio's biggest warning is not aimed at the market itself but at the political and geopolitical conflicts after the bubble bursts—such as the UK having six prime ministers in seven years, a symptom of government funding exhaustion and voters attacking each other on how to raise funds. The burst of the AI bubble could become a catalyst igniting political turmoil at the end of an 80-year cycle. Wall Street institutions like Goldman Sachs and Apollo have recently issued similar warnings, pointing out that tech stocks are in a profit bubble and the 40-year-effective 60/40 investment portfolio strategy has failed.