Investors warned of the imminent collapse of the AI “bubble”

The market story of recent years related to artificial intelligence (AI) is a “classic bubble” that is already approaching the stage of collapse. Ray Dalio, the founder of the largest American hedge fund Bridgewater, said this at the Forbes Global CEO conference in Singapore, Bloomberg reports.

In his opinion, the market is already close to the border where problems will begin, and several factors of different nature can provoke a rapid collapse.

A financial bubble is an unbridled growth in the capitalization of a company or companies from the same industry, which is not supported by real cash flows and prospects, and therefore ends with the collapse of the shares of its participants and the general fall of the stock market.

Dalio recalled that the leaders in the AI ​​race are attracting a huge amount of funds, and the stakes continue to rise. Additionally, wealth taxes or attempts to convert unrealized profits into cash could trigger a collapse.

The financier emphasized that the presence of a hypothetical billion dollars in shares does not always mean that these funds actually exist. “To spend that money, you have to sell assets to get the money—and that’s when the bubble usually bursts,” he concluded.