Bridgewater Dalio: AI bubble does exist but has not reached the point of bursting.

On Thursday local time, Ray Dalio, founder of Bridgewater Associates, stated that despite investments related to artificial intelligence driving the market into a bubble, investors do not need to immediately exit as a result. Dalio believes that while a bubble is forming, external factors are needed to burst it, which are unlikely to come from tighter monetary policy but could come from higher wealth taxes. Dalio mentioned that bubbles do not burst because of the performance of a specific company. "Bubbles don't burst just because one day people wake up and suddenly feel that profits are not enough to support prices," he said. He explained that bubbles form when people decide to convert financial wealth into cash, and the bursting of the bubble often accompanies a decline in the market and the economy, and even major political changes. Although Dalio does not recommend investors to immediately sell because there is a bubble, he suggests taking defensive measures, such as holding gold or reducing high-risk credit exposure.