Bridgewater Associates founder Ray Dalio has warned about the shaky state of markets. In an interview on The Diary of a CEO podcast, he stated that the enthusiasm around artificial intelligence has inflated a bubble comparable to 1929 and 2000 — and named the specific mechanisms that will lead to its collapse.
Classic Signs
When host Steven Bartlett asked if Dalio sees signs of a bubble, he did not dodge the question:
"There is almost nothing easier than issuing shares".
The investor expressed doubts about the system of capital circulation within companies: how can a firm raise $50 million, get a valuation twenty times that, and create a paper billionaire without actually transferring a single dollar.
Dalio's thesis is simple — the euphoria around AI is real. The technology will indeed change productivity, but the price being paid for it today carries all the hallmarks of 1929 and 2000.
The billionaire especially highlighted the behavior of retail investors, who, without the necessary experience, are entering leveraged trades en masse, including ETFs on indices.
According to him, we are observing the classic anatomy of a financial bubble — prices detached from profits, retail speculation with borrowed capital, and a flow of new share placements:
"It looks more like a dice game", — added Dalio.
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Wealth is Not Money
Dalio reminded about a key difference in financial terms:
"Wealth is not the same as money. Many get rich, but to get money, you need to sell the wealth."
The mechanics of a reversal, he said, are always the same. When people need money — due to tax changes or rising rates — they have to service their debt. The bubble bursts, prices fall, people lose funds. The process goes in reverse: on the way up, rising assets served as collateral for new loans — on the way down it works in the opposite direction.
Dalio has repeatedly pointed out that the "wealth/money" ratio in the US is now about 8.5 to 1 — roughly 750% more financial wealth than real money. In his opinion, this is comparable to the peaks before the 1929 crash and the dot-com crash in 2000.
The investor gave a real-life example: his acquaintance, managing an AI company, is raising hundreds of millions of dollars right now — because he expects a downturn and wants to use the money to buy up competitors when the market turns.
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The "Big Cycle" and What Comes After
Dalio views the market situation in the context of the "Big Cycle" — an 80-year model combining debt dynamics, rising inequality, and internal political conflicts. The convergence of these three forces has historically ended in systemic crisis: debt-laden governments, extreme wealth stratification, and escalating rivalry with China.
The billionaire highlighted two factors that usually "puncture" a bubble: rising interest rates, which make debt servicing more expensive, and a surge in share issuance as companies rush to take advantage of investor enthusiasm.
His main warning is not about the market, but about what comes after. In Dalio's interpretation, the collapse of the AI bubble is not just a financial event, but a trigger for political and macroeconomic conflicts that have historically accompanied the end of the 80-year cycle.
"When the bubble bursts, people go for each other's throats. Governments are left without money, and voters clash over where to get it," explained the expert.
Recall that in July 2025, Ray Dalio advised keeping 15% of savings in Bitcoin.
