Ray Dalio Says AI Will Transform the World, but AI Stocks Could Still Crash 80%
NEW YORK — Billionaire investor and Bridgewater Associates founder Ray Dalio says artificial intelligence will undoubtedly transform the world, but he warned investors not to assume that AI-related stocks will continue rising indefinitely.
Speaking about the rapid growth of the AI sector, Dalio said:
“They’ll still drop by 80%.”
His remarks highlight the distinction between believing in a technology’s long-term potential and expecting uninterrupted gains in the companies associated with it.
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AI’s Long-Term Promise
Dalio said artificial intelligence is poised to reshape industries, improve productivity, and drive significant economic change over the coming decades.
He believes AI will become one of the defining technologies of the modern era, influencing everything from business operations to healthcare and scientific research.
A Warning for Investors
Despite his optimism about AI, Dalio cautioned that stock prices can become detached from underlying fundamentals during periods of market enthusiasm.
He suggested that even companies with strong long-term prospects could experience severe declines if valuations become excessively stretched or market sentiment changes.
Lessons From Market History
Dalio’s comments echo previous technology cycles, including the dot-com boom, where many innovative companies experienced dramatic share price declines despite the internet eventually transforming the global economy.
His warning serves as a reminder that groundbreaking technologies and successful investments are not always the same thing.
Why It Matters
Artificial intelligence has become one of the most influential investment themes in global markets, driving significant gains in technology stocks.
Dalio’s remarks encourage investors to distinguish between confidence in AI’s future and the risks associated with elevated market valuations.
Conclusion
Ray Dalio remains highly optimistic about artificial intelligence’s ability to change the world but believes investors should remain disciplined. His warning that AI-related stocks could still suffer steep declines underscores the importance of balancing long-term conviction with prudent risk management.
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