Daijiworld Media Network - Abu Dhabi

Abu Dhabi, Dec 8: Global investor and Bridgewater Associates founder Ray Dalio has said that the Middle East—particularly the UAE, Saudi Arabia and Qatar—is rapidly emerging as one of the world’s most influential artificial intelligence hubs, comparing its rise to Silicon Valley’s dominance in technology.

In an interview with CNBC, Dalio said the region has successfully blended massive sovereign capital, world-class infrastructure and an inflow of global talent, creating a powerful magnet for investment managers and AI innovators.

Over the past year, Gulf nations have rolled out multi-billion-dollar ventures to build cloud systems, data centres and AI ecosystems. Saudi Arabia’s Public Investment Fund recently struck a $10 billion agreement with Google Cloud aimed at establishing a “global AI hub” in the kingdom. The UAE, meanwhile, has teamed up with OpenAI, Nvidia, Oracle and Cisco to build the ambitious Stargate AI campus.

Dalio said the Gulf’s transformation was no accident, calling it the result of decades-long planning, stable governance and bold economic vision.

“There’s a buzz here, the kind you feel in San Francisco—an energy around AI and technology,” he said. He described the UAE as “a paradise in a troubled world,” praising its leadership and quality of life.

Global Economy Facing ‘Precarious’ Period

However, Dalio warned that the next two years could be unstable for the global economy due to pressure from three major cycles: mounting debt, intensifying U.S. political conflict and rising geopolitical tensions.

He said debt stress is already visible across private equity, venture capital and refinancing markets, indicating bubble-like conditions similar to the year 2000.

“We are in a bubble by almost all measures,” he noted.

Dalio expects U.S. political disruptions to escalate as the country moves toward the 2026 elections, adding that governments worldwide are stuck between soaring debt and the political impossibility of raising taxes or cutting public benefits.

AI Boom Also in Bubble Territory

Dalio acknowledged that the AI market itself is in bubble territory—a concern echoed by global tech leaders including OpenAI CEO Sam Altman and investor Michael Burry, who predicts a correction within the next two years.

But Dalio cautioned investors not to exit prematurely.

“All bubbles happen during periods of great technological change,” he said. “You don’t want to leave the party just because valuations are high—you watch for the moment the bubble actually bursts.”

Historically, he said, bubbles “pop” when liquidity tightens or when large investors are forced to sell assets to meet financial obligations.

He added that stress is building in venture capital, private equity and commercial real estate, where low-interest debt is now turning expensive.

Even as the world navigates uncertainty, Dalio believes the Middle East’s AI ambitions will continue driving global attention—and capital—towards the region.