Ray Dalio said AI is a “classic bubble,” warning that large amounts of debt are being used to fund AI and that rising interest rates could push the bubble toward a break point. He said the bubble could begin to burst as rates climb and wealth is forced into cash, with potential triggers including wealth taxes and measures that convert unrealized gains into cash — actions that often precipitate asset sell-offs. "We're in the cycle approaching that point; I think we're pretty close," he added.