Bridgewater's Ray Dalio Warns AI Bubble Nearing 2000 Levels: Wealth ≠ Money, IPO Mania Key Force Puncturing Bubble

BlockBeats News, August 4th – Ray Dalio, founder of Bridgewater Associates, issued the sternest market warning on the "CEO's Journal" podcast, stating that the AI frenzy has pushed the market into a bubble territory reminiscent of 1929 and 2000. When the host mentioned Jeremy Grantham's earlier statement that the current situation is the "largest investment bubble in American history," Dalio directly responded, "He is right."

Dalio explained the core contradiction of the bubble mechanism with a simple deduction—investors buy shares of an AI company for $100 and then use it as collateral for borrowing. When the market reverses, and everyone needs cash at the same time, the price could 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 becoming wealthy, but wealth cannot be used for consumption. You must 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 main forces that pop bubbles—rising interest rates that increase the cost of debt financing and a surge in stock issuance. 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 set to debut at a valuation of nearly $1 trillion as early as October; OpenAI has also applied for listing with a valuation target exceeding $1 trillion.

Dalio's more significant warning is not directed at the market itself but at the political and geopolitical conflicts after the bubble bursts—where the UK has had six prime ministers in seven years, symptomatic of government funding depletion and voters attacking each other on how to raise funds. The bursting of the AI bubble could become the spark that ignites 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 a profit bubble in tech stocks and the obsolescence of the 40-year-old 60/40 investment portfolio strategy.