Ray Dalio Warns AI Bubble Approaches Bursting Point

Billionaire investor Ray Dalio stated Wednesday that surging artificial intelligence borrowing, rising interest rates, and the pressure to convert paper wealth into cash are pushing markets closer to a bubble burst. Speaking at the Forbes Global CEO Conference in Singapore, the Bridgewater Associates founder characterized AI as a "classic bubble," according to a report by Bloomberg.

Dalio noted that the immense debt taken out to fund artificial intelligence, combined with rising interest rates, serves as the critical pressure point where bubbles begin to pop. In a Bloomberg Television interview aired Tuesday, he compared the current boom to the late 1920s, stating that such bubbles consistently coincide with major technological innovations.

Surging Spending and Debt Issuance

Meanwhile, artificial intelligence spending continues to accelerate across the broader technology sector. JPMorgan Chase CEO Jamie Dimon estimated that spending across the hyperscaler ecosystem could rise from roughly $700 billion this year to $1 trillion next year. Goldman Sachs expects the five biggest hyperscalers to issue about $250 billion in bonds this year and $400 billion in 2027.

According to iShares data cited in the report, Amazon.com Inc., Microsoft Corp., Alphabet Inc., Meta Platforms Inc., and Oracle Corp. issued roughly $200 billion of investment-grade debt during the first half of 2026. That figure is nearly double their issuance during all of 2025.

Market Concentration and Catalysts

Market concentration remains high alongside these debt levels. Data from Creative Planning cited by Yahoo Finance indicates that Nvidia Corp., Apple Inc., and Microsoft account for more than 21% of the S&P 500 index, which hit fresh highs alongside the Nasdaq composite on Tuesday.

Dalio also pointed out that wealth taxes and other efforts to cash out unrealized gains could help trigger a market correction. Echoing similar concerns, investor Michael Burry stated Tuesday that the market is "quite obviously in its first stage of grief, denial," adding that this stage typically lasts six to nine months.

Key facts

• Ray Dalio stated at the Forbes Global CEO Conference that the AI bubble is "approaching" the point of bursting.
• Amazon, Microsoft, Alphabet, Meta, and Oracle issued roughly $200 billion of investment-grade debt in the first half of 2026.
• Goldman Sachs expects the five biggest hyperscalers to issue about $250 billion in bonds this year and $400 billion in 2027.
• Nvidia, Apple, and Microsoft account for over 21% of the S&P 500 index.