Bridgewater founder Ray Dalio speaks to CNBC at the Future Investment Institute 2025 Summit in Riyadh on October 28, 2025.
CNBC
Bridgewater Associates founder Ray Dalio said Monday that the Middle East is rapidly emerging as one of the world’s most powerful AI hubs, comparing the region’s rise to Silicon Valley’s fascination with technology in general.
Dalio said in an interview with CNBC that the UAE and its neighbors combine vast pools of capital and an influx of global talent, creating an allure that attracts investment managers and AI innovators alike.
This year, the UAE and Saudi Arabia launched a multibillion-dollar effort to build cloud, data centers and other AI infrastructure, backed by sovereign wealth capital and global technology partnerships.
A $10 billion deal between Google Cloud and the Saudi Arabian Public Investment Fund announced this year aims to create a “global AI hub” in the country as part of a broader push to host data centers and AI workloads locally.
Earlier this year, technology giants OpenAI, Oracle, Nvidia, and Cisco joined forces to build the massive Stargate artificial intelligence campus in the United Arab Emirates.
Asked if he thought the UAE, Saudi Arabia and Qatar could be leaders in the AI race, Dalio said: “What they’ve done is create talent. So this region is becoming a kind of capitalist Silicon Valley… So now people are coming in… money is coming in, talent is coming in.”
Dalio, who has been visiting Abu Dhabi for more than 30 years, said the transformation of the Gulf region is the result of deliberate national strategy and long-term planning. He described the UAE as a “paradise in a troubled world”, citing its leadership, stability, quality of life and ambition to build a globally competitive financial ecosystem.
“We’re talking about it here, the same way we’re talking about AI and technology in San Francisco and places like that. It’s very similar to that,” Dalio said.
The next two years will be “unstable”
The Bridgewater founder reiterated his concerns that markets are in a bubble, warning that multiple forces are converging to move the global economy toward an uncertain future in the near term.
“The next year or two is going to be even more volatile,” he said, pointing to the convergence of what he called three dominant cycles: debt, U.S. political conflict and geopolitics.
Global debt overhang is already pushing stress into some parts of the market.
“We’re seeing cracks in the market on a number of fronts: private equity, venture capital, debt being refinanced. So I think we’re in a bubble by pretty much all of those measures,” Dalio said, noting that while there are similarities to the 2000 bubble, there are no similarities to the 1929 bubble.
Dalio also predicts that American politics will become even more disruptive heading into 2026. “We’re going to see a lot more conflict in different ways heading into the 2026 elections,” he said, adding that rising interest rates and concentration of market power are further exacerbating vulnerabilities.
“No country can…keep accumulating debt, but politically it cannot raise taxes or cut benefits. That’s why we’re stuck.” These fiscal constraints are fueling widespread domestic polarization. “Right now there is left-wing populism and right-wing populism, and this represents irreconcilable differences.”
Dalio reiterated his view that the AI bull market is in bubble territory, but advised investors not to rush out of the market just because valuations are high.
Concerns about an AI bubble have been swirling in recent months, with prominent voices such as OpenAI CEO Sam Altman suggesting the AI market is in a bubble. Michael Barry, the investor responsible for the 2008 subprime mortgage crash, predicts that the artificial intelligence market bubble could burst within the next two years.
“All bubbles occurred during times of great technological change,” Dalio said. “I don’t want to break out of a bubble just because it’s a bubble. I want to look for the pain in the bubble.”
He said the trigger for such “tingles” usually comes from monetary tightening or the need to force the sale of wealth to meet obligations.
He also warned of stress in sectors such as venture capital, private equity and commercial real estate, where low-yield bonds are now being rolled over at higher rates.
