Dalio Warns: AI Bubble Won't Burst Yet, It's Too Early to Exit

November 21st. Billionaire investor Ray Dalio, the founder of Bridgewater Associates, holds the belief that even if one is concerned that the market frenzy is a bubble on the verge of bursting, one should not hastily abandon the field of artificial intelligence (AI). In an interview with CNBC on Thursday, he stated that he is firmly convinced that the current stock market is deeply trapped in a bubble, but this still is not a valid reason for investors to exit AI trades. Dalio explained to the media that the reason why investors should remain in the market is straightforward: the conditions for the current bubble to burst simply do not exist. "Do not sell merely because of a bubble," said the legendary fund manager. "One needs to time it. What will cause the bubble to burst? Usually, it is the tightening of monetary policy, and we are not facing such a situation at present." In Dalio's opinion, the bubble will only burst when there is a demand for asset liquidation in the market. He speculated that events like the Federal Reserve raising interest rates or consumers facing a wealth tax could trigger sell-offs. In the foreseeable future, both of these scenarios seem unlikely to occur in the market. "I want to emphasize again that the stock market may potentially rise significantly before the bubble bursts," Dalio added.