Dalio from Bridgewater has come out again to pour cold water—he thinks the global economy might face turbulence in the next year or two. However, he’s not urging everyone to panic-sell AI assets. Instead, he emphasizes: don’t be scared off by high valuations; what you really need to watch out for are the signs of a bubble about to burst.

This time, he pointed out three major issues piling up: mounting debt, intensifying political polarization, and escalating geopolitical conflicts. Private equity, the venture capital circle, and debt sectors waiting for refinancing have already started showing problems. Governments everywhere are under fiscal strain, populism is emerging from all sides, and social divisions are becoming increasingly apparent. With the US midterm elections coming up in 2026, political confrontation is expected to get even fiercer. The high interest rate environment, combined with excessive market concentration, makes the whole system very fragile.

Dalio compared the current situation to the tech bubble of 2000, saying it’s similar, but not as terrifying as 1929. AI industry valuations are indeed sky-high, but he advises investors not to rush for the exits—historically, periods of technological revolution are prone to bubbles. The key is to watch for signs of rupture: the usual trigger is a sudden tightening of monetary policy, or having to sell assets at a loss to repay debt. Recently, both OpenAI’s CEO and the investor who predicted the 2008 subprime crisis have been warning of an AI bubble, but Dalio is more focused on the pressure in venture capital, private equity, and commercial real estate.

Interestingly, he also mentioned that the Middle East is quietly becoming a new AI powerhouse. Places like the UAE are pouring money into attracting global talent, and investment managers and AI entrepreneurs are flocking there. The UAE government is highly efficient, socially stable, and offers a high quality of life, with ambitions to build a world-class financial ecosystem. This year, the UAE and Saudi Arabia have launched hundreds of billions of dollars in projects to build cloud computing, data centers, and other AI infrastructure, backed by sovereign wealth funds and tech giants—for example, the $10 billion agreement between Google Cloud and the Saudi Public Investment Fund, and OpenAI’s massive data center campus in the UAE. Dalio says this is the result of a long-term national strategy, with both capital and talent flowing into the Gulf region.

So the real question now is: are you ready to find a safe harbor before the storm hits?