Dalio warns: The AI bubble will not burst temporarily, it's still too early to exit

Billionaire investor and founder of Bridgewater Associates, Ray Dalio, believes that even if you worry that the market frenzy is a bubble waiting to burst, you shouldn't give up on the field of artificial intelligence (AI) too early. In an interview with CNBC on Thursday, he stated that he is convinced the current stock market is deeply entrenched in a bubble—yet this is still not a reason for investors to exit AI trades.

Dalio explained to the media that the reason investors should stay in the market is simple: the conditions for a bubble to burst do not currently exist. "Don't sell just because of the bubble," the legendary fund manager said, "You have to seize the opportunity. What will pop the bubble? Usually, it's tightening monetary policy, and we are not facing that situation right now."

In Dalio's view, a bubble will only ultimately burst when there is a demand for asset liquidation in the market. He speculated that events such as the Federal Reserve raising interest rates or consumers facing a wealth tax could trigger a sell-off. In the foreseeable future, both scenarios seem unlikely to occur in the market.

"I want to reiterate that the stock market could rise significantly before the bubble bursts," Dalio added. (Jinshi)