Bridgewater warns Big Tech’s AI splurge is drifting into a ‘dangerous’ bubble

Summary

Bridgewater Associates’ co‑chief investment officer Greg Jensen is warning that the AI boom is entering a “dangerous” phase as Big Tech increasingly leans on external capital to fund massive compute and data‑center build‑outs. In a note cited by Reuters, Jensen argues there is a “reasonable probability” the market soon finds itself in an AI bubble, with valuations and capex racing ahead of clear profit visibility. He points to a surge in AI data‑center and project financing deals—up to roughly $125 billion this year from $15 billion over the same period in 2024—as evidence that internal cash flows are no longer sufficient to sustain the current investment tempo. Recent disappointments, such as Oracle’s weaker‑than‑expected AI‑driven forecasts, have already rattled investors and highlighted how hard it is to translate AI hype into earnings. If the thesis is right, late‑stage private rounds and highly levered infrastructure bets could be most exposed, even if long‑term demand for AI compute remains strong.