According to Zhi Tong Finance App, Ray Dalio, founder of Bridgewater Associates, has warned that artificial intelligence is a "classic bubble," and that this bubble is approaching its bursting point due to continuously rising interest rates and the need to convert wealth into cash.

On Wednesday, Dalio said at the Forbes Global CEO Conference held in Singapore that people are borrowing enormous amounts of debt to fund artificial intelligence. As interest rates continue to climb, the moment when the bubble begins to burst will arrive.

The billionaire said, "We are in this cycle, at the stage before that point but approaching it," and "I think we are already very close to that point." His remarks came as tech giants are pouring hundreds of billions of dollars into bets on artificial intelligence, increasingly relying on debt financing, while market gains are becoming concentrated in a handful of stocks.

Global bond yields have surged to their highest levels in decades, raising the financing costs of the massive investments needed to build artificial intelligence infrastructure. Nevertheless, stock valuations continue to climb, and optimism about tech earnings has driven the S&P 500 and Nasdaq 100 to record highs this week.

Dalio, who has long warned about an artificial intelligence bubble, said there are other factors that could trigger a bubble burst, including wealth taxes and various other moves to convert unrealized gains into cash. "Everyone says 'I'm worth a billion dollars,' but okay, try spending it," he added. "To spend it, you have to sell wealth in exchange for money—and that is usually the link where a bubble gets punctured."