Billionaire Ray Dalio is sounding the alarm about investor enthusiasm in artificial intelligence companies.
In a new All-In Podcast interview, the investor warns that most investors see the technology and the tech companies as one and the same.
According to Dalio, the inability to see the difference between the tech and the companies has often led to investor losses.
“I think when we look at the bubble question on AI, what a lot of people don’t realize in bubbles is that through all technologies, they think that they are betting on the technology when they buy the stocks in the companies. That’s not true, okay? There’s a giant difference between the behavior of the companies and the behavior of the technologies.
And that the norm is that a lot of companies won’t survive at the start. Very small percentage, and they’ll all fight and so on. But the technologies will go on, and it’ll be great.”
The billionaire points to the tech and telecom bubble in the early 2000s to support his thesis.
“Of course, we’ve seen it to some extent with the 2000 bubble in the technologies and what went on. But even if I describe what it was like in the late 20s, it was unbelievable, but the technologies will go on, but the companies won’t necessarily go on.”
Dalio believes that AI is in a precarious state, noting that China’s approach to the technology could ultimately lead to massive losses for American AI labs.
“Right now, it looks to me like AI basically is eating everything, and it might eat itself. And what I mean by that is not produce adequate profits. We can’t take just a domestic view of that. We have to look also at what’s happening in China and make interesting distinctions there… They have a system in which they might believe that profits are a second consideration. They’re not necessarily needed in order to achieve the best results.
For example, in China, they would say the usage of AI is fantastic. So it should be like electricity, and let’s make it free for everyone. And let’s make it open source for everyone. They might get much higher usage, and they’ll get their productivity gains through the usage, and we have a profit system to pay back…
How do you compete in that world? What do you do with that? In other words, just imagine that their technologies are almost as good as ours because they are, they’re not far behind. But you could get them for free, open source. Okay, now you’ve got to pay it back.”
Disclaimer: Opinions expressed at CapitalAI Daily are not investment advice. Investors should do their own due diligence before making any decisions involving securities, cryptocurrencies, or digital assets. Your transfers and trades are at your own risk, and any losses you may incur are your responsibility. CapitalAI Daily does not recommend the buying or selling of any assets, nor is CapitalAI Daily an investment advisor. See our Editorial Standards and Terms of Use.