Ray Dalio warns AI bubble is nearing its bursting point as rates rise

Ray Dalio thinks the AI trade is running out of runway. In an October 6, 2026 interview with Bloomberg Television, the Bridgewater Associates founder said the AI market looks like a bubble getting close to its burst point. His reasoning is not that the technology is overhyped. It is that the money behind it is getting more expensive, and some of the biggest spenders now need cash. What Dalio actually said Dalio described current conditions as showing “classic signs” of a bubble. He put the AI boom alongside two famous precedents: the 1929 stock market crash and the dot-com bubble of 2000. The core of his argument centers on the hyperscalers. That is the industry term for the giant firms pouring capital into AI infrastructure at scale. According to Dalio, these companies are increasingly turning to debt financing rather than raising equity. He tied that shift to rising borrowing costs and growing cash needs. The three signals he is watching Dalio laid out specific indicators that, in his view, tend to show up when a bubble starts to unwind. The first is forced selling to raise cash. When investors or companies must liquidate assets to cover obligations, prices fall because of need, ...