Ray Dalio says Middle East is becoming a 'Silicon Valley of capitalists’

The Middle East is accelerated emerging arsenic 1 of the world's astir almighty AI hubs, Bridgewater Associates' laminitis Ray Dalio said Monday, comparing the region's emergence to Silicon Valley's propulsion for each things tech. 

Speaking to CNBC, Dalio said the United Arab Emirates and its neighbors person combined immense pools of superior with an influx of planetary talent, creating a magnet for concern managers and AI innovators alike.

The UAE and Saudi Arabia person this twelvemonth launched multibillion-dollar initiatives to physique cloud, information centers and different AI infrastructure, underpinned by sovereign-wealth superior and planetary tech partnerships.

A $10 cardinal statement betwixt Google Cloud and Saudi Arabia's Public Investment Fund announced this year aims to make a "global AI hub" successful the country, arsenic portion of a broader propulsion to big data-centers and AI workloads locally.

Earlier this year, exertion giants OpenAI, Oracle, Nvidia and Cisco combined forces to physique a large Stargate artificial intelligence campus successful the United Arab Emirates.

When asked if helium thinks that the UAE, Saudi Arabia and Qatar tin beryllium leaders successful the AI race, Dalio said, "What they've done is to make talented people. So this [region] is benignant of becoming a Silicon Valley of capitalists ... So present radical are coming successful … wealth is coming in, endowment is coming in."

Dalio, who has been visiting Abu Dhabi for much than 3 decades, said the Gulf's translation is the effect of deliberate statecraft and semipermanent planning. He described the UAE arsenic "a paradise successful a satellite that's troubled," citing its leadership, stability, prime of beingness and ambition to physique a globally competitory fiscal ecosystem.

"There's a buzz here, the mode there's a buzz successful San Francisco, places similar that, astir AI oregon technology. It's precise akin to that," Dalio said.

The Bridgewater laminitis warned that the planetary system was headed toward an uncertain aboriginal successful the adjacent word owed to a confluence of aggregate forces, reiterating his concerns astir markets being successful bubble.  

"The adjacent twelvemonth oregon 2 successful the aboriginal is going to beryllium much precarious," helium said, pointing to the convergence of what helium calls the 3 ascendant cycles: debt, U.S. governmental struggle and geopolitics.

The global indebtedness overhang is already forcing accent into pockets of the market.

"We're seeing cracks successful the markets successful a fig of ways, backstage equity, task capital, indebtedness that's being refinanced, and each of those. So we are successful a bubble, I believe, by astir each of those measures," Dalio said, highlighting similarities with the 2000 bubble but not the 1 successful 1929.

He besides expects U.S. authorities to go much disruptive heading into 2026. "As we spell into the 2026 elections … you volition spot a batch much struggle successful antithetic ways," Dalio said, adding that elevated involvement rates and concentrated marketplace enactment compound the vulnerability.

"Every state … cannot proceed to accumulate the indebtedness they have, yet politically they can't rise taxes and they can't chopped benefits. So they're stuck." That fiscal hindrance feeds into a broader emergence successful home polarization: "We present person populism of the near and populism of the close … which means irreconcilable differences."

Dalio reiterated his presumption that the AI rally is successful bubble territory, but advised investors not to unreserved for exits conscionable due to the fact that valuations are stretched.

Concerns astir an AI bubble person been swirling successful caller months, with notable voices specified arsenic OpenAI CEO Sam Altman suggesting that the AI marketplace was successful a bubble. Investor Michael Burry, who called the 2008 subprime owe crash, has forecast the artificial quality marketplace bubble could collapse successful the adjacent 2 years.

"All the bubbles took spot successful times of large technological change," Dalio said. "You don't privation to get retired of it conscionable due to the fact that of the bubble. You privation to look for the pricking of the bubble."

The catalyst for that "pricking," helium said, usually comes from a tightening of wealth oregon a forced request to merchantability wealthiness to conscionable obligations.

He besides warned of accent successful task capital, backstage equity and commercialized existent estate, sectors wherever inexpensive indebtedness is present rolling implicit astatine higher rates.