Dalio: The Global Economy Is 'Perilous' in the Next Two Years, Don't Rush to Exit AI Due to High Valuations
Bridgewater founder Ray Dalio warns that the global economy faces a precarious situation over the next one to two years due to a combination of high debt levels, domestic political conflicts, and geopolitical tensions. He notes stress in areas including private equity, venture capital, and debt refinancing. Despite identifying an AI bubble similar to the 2000 tech bubble, Dalio advises against exiting investments solely due to high prices. Instead, he emphasizes watching for concrete signals of a bubble burst, typically triggered by monetary tightening or forced asset sales. He also highlights growing financial stress in venture capital, private equity, and commercial real estate due to rising refinancing costs.
Simultaneously, Dalio points to the Middle East, particularly the UAE and Saudi Arabia, as emerging global AI hubs. He compares the region’s dynamism to Silicon Valley, citing large-scale investments in AI infrastructure, talent inflow, and strong sovereign wealth support. Major projects like Google Cloud’s $10 billion deal in Saudi Arabia and the “Stargate” data center initiative in the UAE reflect the region’s strategic transformation into what Dalio calls a “Silicon Valley for capitalists.”
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