Ray Dalio says you can be right about AI and still lose money – Business Insider

Billionaire investor Ray Dalio warns investors are confusing a bet on artificial intelligence with a bet on AI stocks.
“People bet on the technology, which, I’ll bet on the technology, but they think that buying the stocks is betting on the technology, which is a different thing, because the stocks can be expensive,” the Bridgewater Associates founder said Wednesday in an interview with Bloomberg TV.
His comments come as investors continue pouring money into companies tied to the AI boom, driving stock markets to record highs and fueling debate over whether valuations have become detached from fundamentals.
That dynamic is common during major technological shifts.
“All great technology changes produce bubbles,” he said.
The reason, Dalio said, is that companies racing to dominate a new technology face a difficult choice.
“You have to either spend a ton of money to capture your market share and don’t worry about whether it’s too much or not, or you don’t spend enough money and you lose your market share,” he said.
Take a smarter break in your day – and see how far you get.
But bubbles don’t burst simply because prices become excessive. Instead, the real risk emerges when investors need cash and are forced to sell assets.
“You cannot spend wealth. You have to sell wealth to get money, because you can only spend money,” Dalio said.
Successful market timing requires understanding both the bubble and recognizing what could force investors to sell.
“The pricking is the converting of wealth into money,” Dalio said.
Dalio’s latest comments echo concerns he raised earlier this year about the gap between technological breakthroughs and investment returns.
In March, he said on the “All-In Podcast” that investors often confuse betting on a breakthrough technology with betting on the companies trying to profit from it.
Dalio pointed to the dot-com era, when the internet transformed the world, but many of the companies associated with the boom ultimately failed.
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