AI bubble chatter heats up: What Ray Dalio wants investors to do as US lawmaker sounds warning

Amid soaring valuations, artificial intelligence bubble has become the buzzword on the street. While many are expecting the speculative, larger-than-dot-com bubble to pop in coming days, ace investor Ray Dalio has advocated against giving up the positions, just yet.

In an interaction on CNBC’s ‘Squawk Box,’ Dalio said, “don’t sell just because there’s a bubble.” The Bridgewater founder, however, said, “But if you look at the correlations with the next 10 years’ returns, when you are in that territory, you get very low returns.”

The remarks came as AI superstar Nvidia continue to rule the charts with better-than-expected quarterly results.

Meanwhile, Nvidia closed at $178.88 on Friday, which was a decrease from Thursday’s close of $180.64. This means the stock fell by $1.76 (or about 0.97%) compared to the previous day.

Despite the concerns, Nvidia CEO Jensen Huang has brushed off bubble concerns. “We see something very different,” Huang told analysts earlier this week.

The AI bubble is now being discussed in political sphere as well. US lawmaker Alexandria Ocasio-Cortez, the Representative from New York, is among the major voices that has expressed what may happen when the AI bubble bursts.

Trump's economy is being held up by a massive AI bubble.

A recent study found that of 300 companies that owned generative AI tools, 95% reported zero return on their investments.

We will not entertain a bailout of these companies should this bubble pop. pic.twitter.com/4YlOMfgSah

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— Rep. Alexandria Ocasio-Cortez (@RepAOC) November 19, 2025

“Trump's economy is being held up by a massive AI bubble. A recent study found that of 300 companies that owned generative AI tools, 95% reported zero return on their investments. We will not entertain a bailout of these companies should this bubble pop,” Alexandria Ocasio-Cortez recently said.

Investor sentiment has been rattled recently by several developments, including a noticeable dip in retail traders' enthusiasm for "buying the dip."

This caution comes alongside a hit to Oracle bonds on news the company plans to increase its substantial debt to finance artificial intelligence infrastructure, and as lenders seek greater protection on loans to major tech companies, citing concerns over debt-financed AI investments.

The boom and recent retreat in AI and AI-adjacent stocks has drawn comparisons to some of history's most notorious market manias, from the dot-com frenzy of the late 1990s to the more recent cryptocurrency boom.

(With inputs from Reuters)