'Wealth is not the same as money': Ray Dalio sees the ‘classic signs’ of a bubble with AI, says the stock market looks like the run-up to 1929 or 2000

This renewed warning comes after SpaceX went public on June 12 with the largest initial public offering in history, while both Open AI and Anthropic prepare to launch IPOs that are expected to push those companies into trillion-dollar valuations. As Fortune notes, this is the type of “speculative issuance surge” that financial experts and market historians believe is the clearest warning sign of a bubble.

The podcast opened with a discussion of Jeremy Grantham, the founder of Grantham, Mayo, Van Otterloo & Company (GMO), who previously told the show that we’re looking at “the biggest investment bubble in American history,” Dalio agreed.

“He’s right,” Dalio said.

The ‘Four Horsemen of the Bubble Apocalypse’

Owen Lamont, senior vice president and portfolio manager for Acadian Asset Management, created a financial bubble checklist that he’s called the “Four Horsemen of the Bubble Apocalypse.” This checklist notes the things that will likely happen when a bubble is about to pop:

• Overvaluation: Current prices are at very high levels, according to expert opinions and historical norms.
• Bubble beliefs: A large number of market experts say prices are too high and will likely rise even higher.
• Equity issuance: A high level of equity issuance from new firms (IPOs) and existing firms over the last year, accompanied by lower levels of repurchases.
• Inflows: An unusually high number of new investors entering the stock market.

The overvaluation horseman seems to have already come to fruition. According to Advisor Perspectives, the S&P 500 is currently overvalued by 116% to 207% based on monthly data for June 2026, and Cerity Partners reports that data suggests the market is overvalued at this time.

Meanwhile, financial experts such as Grantham, Michael Burry and Torsten Sløk have all spoken about their AI bubble beliefs, sharing Dalio’s concerns. There’s also a general consensus to consider: according to the Globe and Mail, the Bank of America’s Global recent fund managers survey found that managers believe an AI bubble is “the most pressing tail risk facing the market right now.”

While speaking with Bartlett on the podcast, Dalio mentioned surging stock issuances as one of two primary factors that — along with rising interest rates — can “prick” a bubble. And this particular horseman is already in the books after SpaceX went public with a massive evaluation and has traded below its IPO price ever since.

Meanwhile, Anthropic’s upcoming IPO is targeting a near-trillion-dollar valuation, while some analysts believe OpenAI’s IPO could set the company’s valuation at more than a trillion dollars.

The fourth horseman, inflows, also appears to have come to fruition. In 2025, retail investors — non-professional individuals who buy or sell stocks, bonds or funds — accounted for $5.4 trillion of trading activity, according to independent data firm Vanda. That’s close to a 47% increase from 2024, Forbes reports.

Dalio sees the ‘classic signs’ of a bubble

During the podcast, Bartlett walked Dalio through a hypothetical situation that explains how an AI bubble might pop, as well as the difference between wealth and money.

Let’s say an investor buys one stock in an AI company that’s valued at $100, giving the investor a net worth of $100. That investor then goes to the bank and takes out a $50 loan. Then the market takes a turn for the worse and other investors who bought the same stock start to sell, driving a single share down to $25 — while our investor’s $50 loan still needs to be repaid.

“But now this thing that I have that was worth $100 a couple of months ago is now worth $25 and I’m $25 in a hole,” Bartlett explained. “So I have to quickly sell. And then with everybody selling all the prices of assets dropped. People stop spending money at the restaurants. Like you [Dalio] say, there’s less money around and then the bubble has burst and we’re in this sort of declining [trajectory].”

Dalio’s quick response? “You got it!”

“What’s quite common now is you can issue stock for, let’s say you raise $50 million and you value the company at a billion dollars. Only $50 million was actually spent on that company, but now if you raise that, you’re a billionaire,” he added.