Ray Dalio Calls AI a Classic Bubble Nearing Its Limit as IMF Warns of Global Risk Cocktail

Bridgewater founder Ray Dalio warned at the Forbes Global CEO Conference in Singapore that the AI boom has become a "classic bubble" that is approaching, but has not yet reached, its bursting point. He pointed to debt-funded AI infrastructure, rising interest rates, and mounting pressure on investors to convert paper wealth into cash as the conditions most likely to trigger a collapse. The 10-year Treasury yield stood near 5.26% as he spoke.

The warning landed on the same day the S&P 500 closed at a record 7,818.93, up 0.58% and crossing the 7,800 level for the first time, with the Nasdaq rising 0.45% to 27,599.79 and the Dow adding 253 points to 51,521. Chip stocks led the advance: Nvidia neared a $6 trillion market cap, Marvell Technology gained 5.8%, and AMD rose 3%, even as semiconductor names pulled back slightly in later trading, with the SMH ETF down 0.9%.

IMF Managing Director Kristalina Georgieva, also speaking in Singapore, offered a more nuanced view, saying AI could lift global growth by around 0.5 percentage point but that hyperscaler leverage may create broader financial risks. She warned that high energy costs, record public debt, and the uneven spread of AI investment could weigh on global growth, with the benefits of AI concentrated in the US, China, India, Taiwan, and South Korea while bypassing most of the world. She also cautioned that the AI construction boom, alongside energy and food shocks, could drive inflation, further compounded by tariffs, defense spending, and elevated debt.

Former BitMEX CEO Arthur Hayes separately told CNBC at the Gamma Prime Investing Conference in Singapore that humanity is "wasting multi-trillion dollars" on AI data centers and that the eventual crash and bailout would send crypto higher. Temasek Chief Investment Officer Rohit Sipahimalani, speaking at the Milken Asia Summit 2026 in Singapore, called an AI trade unwind the single biggest risk facing global markets in 2027, while noting the firm still plans to more than double its AI allocation by 2031.

AMD CEO Lisa Su used her South Korea visit to announce that AMD will invest tens of billions of dollars across its global supply chain, citing Samsung Electronics and SK Hynix as critical partners for high-bandwidth memory. Su confirmed she is very satisfied with HBM4, that AMD is ramping HBM4-based Helios AI systems, and that she plans to meet with both Samsung and SK Hynix in Seoul. She also joined a roundtable with South Korean government officials and AI firms to explore local processor pairings and a potential AMD AI research center by year-end, building on earlier visits to TSMC and Foxconn in Taiwan.

On the infrastructure side, SpaceX is looking to raise $40 billion to buy Nvidia chips in a debt deal led by Apollo, described as the latest sign of vast spending on AI chips and infrastructure. Elon Musk clarified that his companies, not TSMC, will build and operate the Terafab AI chip complex in Texas, adding that TSMC could at most sublease part of the site. Intel CEO Lip-Bu Tan confirmed Intel will continue working on the Terafab venture.