Ray Dalio: AI Bubble Severity Comparable to Eve of 1929 Great Depression and 2000 Internet Crash

TechFlow news, August 4, according to Fortune magazine, Bridgewater Associates founder Ray Dalio issued his strongest market warning to date on the "CEO Diary" program, explicitly stating that the current market bubble driven by the AI boom has presented "classic characteristics" highly similar to the eve of the 1929 Great Depression and the 2000 dot-com bubble. He explicitly expressed agreement with the assessment previously made by fellow program guest and GMO co-founder Jeremy Grantham that "this is the largest investment bubble in U.S. history."

Dalio pointed out that the core crisis of the bubble lies in the "confusion of wealth and money"—paper wealth held by investors cannot be directly consumed. Once the market reverses and everyone sells off simultaneously, asset prices could plummet from $100 to $25, while debt remains unchanged. He also identified two triggering factors for "bursting the bubble": rising interest rates and a surge in stock issuance. Currently, SpaceX has completed the largest IPO in history, and Anthropic and OpenAI are rushing to list with trillion-dollar valuations, which is precisely the real-world reflection of the latter.

Regarding bubble judgments, Wall Street institutions such as Goldman Sachs, Apollo, and BCA Research are also shifting, acknowledging that the technology sector has an "earnings bubble" rather than a simple valuation bubble. Dalio places this round of risk under his "Big Cycle" framework, warning that a bubble burst is not only a financial event but could also become a trigger for political polarization and geopolitical conflicts—at which time the real risk may not be investment portfolio losses, but the social unrest that follows.