"The Middle East is rising to become one of the world's most powerful AI hubs."
Ray Dalio The billionaire founder of Bridgewater Associates, one of the world's largest hedge fund management firms, said in an interview with CNBC that countries like the United Arab Emirates, Saudi Arabia, and their neighbors are now akin to"Silicon Valley during the tech boom era."
Countries in the Middle East"are perfectly combining massive capital with world-class talent, becoming magnets for both investors and AI technology developers globally."Dalio continued,
Over the past year, Saudi Arabia and the United Arab Emirates have launched new projects and invested heavily to build AI infrastructure, including cloud services, data centers, and large-scale processing systems, primarily funded by their Sovereign Wealth Funds alongside partnerships with global tech giants.
One of the key deals isan agreementbetween Google Cloud and Saudi Arabia's Public Investment Fund (PIF) valued at over $10 billion to establish a “Global AI Hub” within the country, supporting onshore data centers and AI processing.
Additionally, there is a major project called “Stargate,” a collaboration between OpenAI, Oracle, Nvidia, and Cisco to create another significant AI initiative in the region.
When CNBC asked if the Middle East could become a leader in the AI field, Ray Dalio responded,"What they are doing is building talent. The region is becoming the Silicon Valley of deep-pocketed investors. Now, both money and top talent are flowing in."
He further explained that these countries have strong leadership, high stability, provide good quality of life, and have ambitions to build globally competitive financial systems, adding,"This is a haven amid a chaotic world."
Over the past 30 years, Ray Dalio has frequently visited the Middle East and observed that the changes in the Gulf countries are not accidental but the result of long-term strategic planning, stable governance, and systematic forward investments.
"The atmosphere here is vibrant, like San Francisco or leading global tech cities in the AI era. The feeling is very similar,"Dalio said.
He was also asked about the AI bubble concerns troubling the market, a topic many experts discuss, with even OpenAI CEO Sam Altman acknowledging AI may be in a bubble.
Dalio's view is"Every bubble tends to occur during major technological shifts. You shouldn't exit the market just because it's a bubble, but it's crucial to identify what could trigger its burst."
Regarding triggers for a bubble burst, Dalio pointed to liquidity tightening or situations where investors must sell assets to meet obligations. He warned of pressures on venture capital, private equity, and commercial real estate sectors that previously relied on low-interest loans but now face refinancing amid high interest rates.
He noted that high interest rates and stock markets led by only a few stocks have increased system fragility."No country can keep increasing debt indefinitely, but politically, they cannot raise taxes or cut welfare, so they are trapped,"Dalio said.
Source:CNBC
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