The surge in artificial intelligence spending is moving into what Bridgewater Associates has described as a “dangerous” stage, as major technology companies increasingly rely on external funding to support rapidly rising costs.
The warning highlights growing unease in financial markets, where investors are beginning to question whether the scale of capital being poured into AI can be sustained over the long term.
While AI adoption has spread widely across the economy, concerns are mounting over the potential impact if heavy investment fails to deliver meaningful profits.
“Looking ahead, there is a realistic chance that the market could soon be facing a bubble,” Bridgewater Co-Chief Investment Officer Greg Jensen said in a note.
As AI-related expenses outpace internal cash generation, companies are turning to outside investors to finance ambitious expansion plans.
Data from UBS last month showed that financing for AI data centers and related projects jumped to $125 billion through November, up sharply from $15 billion over the same period in 2024.
Renewed anxiety around the AI trade intensified last week after Oracle issued weaker-than-expected sales and profit guidance for the third quarter.
Jensen noted that surging demand for computing power would require an unprecedented expansion of data center infrastructure, a process constrained by physical, logistical, and financial limits.
He also warned that valuations across the AI ecosystem have climbed sharply, while the U.S. economy is becoming increasingly concentrated around the technology.
