Ray Dalio is looking at AI through an old bubble framework that doesn’t fit this cycle. AI isn’t a leverage-driven narrative bubble like 1929 or 2000—it’s a real, physical, capital-intensive industrial build-out. We’re upgrading the grid, building power plants, expanding fabs, constructing massive new data centers, and reshaping entire industries.
That’s not speculative mania; that’s infrastructure.
The market isn’t euphoric—it’s in a state of ontological shock, trying to price a future it doesn’t understand. Stocks may look expensive by classical models, but this isn’t a classical situation—and it isn’t a bubble. It’s a once-in-a-century transformation colliding with old models.
Well put!
I’m ignoring the “stock market overvalued” people also. The percentage of people invested in stocks has doubled in this century. That money has to go somewhere, thus driving up prices.