Ray Dalio warns on AI stock bets despite tech optimism

Ray Dalio warned that betting on artificial intelligence as a technology is not the same as betting 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," he said in an interview on Bloomberg TV Wednesday.

Investors have poured money into companies tied to the AI boom, driving stock markets to record highs and prompting debate over whether valuations have become detached from fundamentals. "All great technology changes produce bubbles," Dalio said. He said firms racing to dominate a new technology face a stark choice: spend heavily to capture market share or spend too little and lose it.

Bubbles, he added, don't burst merely because prices are high; the real danger comes when investors need cash and are forced to sell. "You cannot spend wealth. You have to sell wealth to get money, because you can only spend money," he said.

ray dalio, ai stocks, artificial intelligence, stock market, valuations, technology bubble, investors, market share, bloomberg tv, forced selling