Speaking at the Forbes Global CEO Conference held in Singapore on October 7, Bridgewater Associates founder Ray Dalio said that a massive amount of borrowed money is currently being poured into artificial intelligence, and as interest rates continue to climb, the AI bubble is set to begin bursting at this stage.

Dalio believes we are now in the cycle phase just before the bubble bursts, but that we are steadily approaching the tipping point, according to a report from a private fund industry website.

He noted that other factors could also trigger a bubble collapse, including wealth taxes and other policy measures that would force the realization of unrealized gains.

Dalio has long warned about the risks of an AI bubble. On July 30 this year, he said in an interview that the current situation is a textbook AI asset bubble, comparable in shape to the eve of the 1929 Great Depression and the 2000 internet bubble.

The firm Dalio founded, Bridgewater Associates, is one of the world's largest and oldest hedge funds and a benchmark in global macro asset management, with assets under management once exceeding $100 billion. Its core investment strategy is the "All Weather" strategy, which is based on risk parity principles, divides the economic environment into four states — recovery, prosperity, stagflation and recession — and allocates across nine categories of low-correlation assets including equities, bonds, commodities and gold to achieve stable returns under different market conditions.

Consistent with Dalio's warnings about an AI bubble, Bridgewater sharply reduced its positions in AI-related names in the second quarter of this year. Data shows that by the end of the second quarter, Bridgewater held 997 U.S. stock positions with a total market value of about $24.376 billion. Among its top 10 holdings, aside from three S&P 500 ETFs, the rest were all companies tied to the AI supply chain, and all were significantly trimmed in the second quarter, including Nvidia, Broadcom, Amazon, Alphabet Class A, Lam Research, Advanced Micro Devices (AMD) and a Korea ETF.

Among them, Nvidia was Bridgewater's largest AI-related holding and its third-largest portfolio position. Nvidia shares hit a record high again on October 6. At the same time, Bridgewater slightly added to its S&P 500 ETF positions in the second quarter.

Bridgewater's top two holdings were both S&P 500 ETFs, and the S&P 500 index they track also hit a record high on October 6. In terms of market performance, as of the close on October 7, the average year-to-date gain of Bridgewater's top 30 holdings was about 44.31%, with a median of about 17.72%.