Ray Dalio Warns AI Bubble Nears 1929 and 2000 Extremes

3 articles · Updated · Yahoo Finance · Aug 4

Ray Dalio said AI-driven market enthusiasm has pushed asset prices into bubble territory comparable to 1929 and the 1999-2000 dotcom peak, endorsing Jeremy Grantham’s warning of an historic U.S. investment bubble.
Dalio’s call comes as speculative issuance accelerates: SpaceX has already completed the largest IPO ever, while Anthropic and OpenAI are racing toward $1 trillion valuations.
Grantham argues AI created a “bubble within a bubble” by reviving a market that had already cracked in 2022, when the S&P 500 fell about 25% from January through October before ChatGPT helped reverse the slide.
A January 2026 paper by Grantham and Edward Chancellor said valuation measures such as price-to-book and cyclically adjusted earnings multiples now sit at extremes exceeded only in 1929, 1972, 1999-2000 and 2021.
That backdrop aligns with Acadian’s “Four Horsemen” bubble test: extreme overvaluation, investors expecting gains despite high prices, heavy equity issuance and a rush of new market participants.