According to a report by The Paper, recently, Bridgewater Associates founder Dalio mentioned the trending topic protagonist - DeepSeek, while sharing his views on AI.

When discussing DeepSeek, Dalio stated that China may lag in chips, but has achieved a lead in application, and in the future, more applications of robots will be seen in China.

In Dalio's view, competition in AI is more important than corporate profits, but investor enthusiasm for AI has fueled a 'bubble' in the US stock market, similar to the situation before the bursting of the Internet bubble in the millennium.

China will lead in applications.

When asked whether he has been paying attention to DeepSeek, Dalio stated that he has been observing it for a while. He believes that everyone will see that China's strategy is to produce very cheap chips and embed them into manufactured products, while robotic technology will be widely popularized.

"We have already seen that China is doing an excellent job at manufacturing things at an extremely low cost," Dalio said.

When discussing AI, Dalio believes that it can indeed greatly drive productivity growth, but the key is what AI specifically refers to, "the super technology giants do indeed pose risks, the real impact of AI lies in who is applying it and how it disrupts the Industry. In the future, there will be disruptors and those who are disrupted. What matters is not who is making these technologies, but who can apply these technologies most effectively and thus bring about change."

Dalio emphasized that competition in AI is more important than corporate profits; those who focus too much on ensuring profits through precise calculations will not win this race, as this is not just business competition. The impact of AI goes beyond the economy and affects the Global competitive landscape.

I think China may be a bit behind in chips, but it will be leading in applications.” said Dalio.

The enthusiasm for AI fuels the "bubble" in US stocks.

At the same time, Dalio warned that investors' enthusiasm for AI has fueled a "bubble" in US stocks, similar to the situation before the burst of the millennium Internet bubble. Dalio pointed out, "Pricing has reached a high level, and there is also interest rate risk; this combination could burst the bubble."

Dalio believes we are currently in a high-interest-rate environment; in other words, it is somewhat similar to 1998 and 1999, when emerging hot topics and star industries that drive productivity improvements were extremely popular. Asset prices are high, and we are also in a rising interest rate environment.

In Dalio’s view, the most important factor is price.

“Absolutely, you have to go to places that have productivity and innovation, focusing on companies that benefit from transformation or create applications that have a huge impact. Of course, you also need to look at different countries, regions, and things; the most important is the price.” Dalio pointed out that many investors often make a mistake in thinking that they need to buy good companies, but when good companies become expensive, they are far less valuable than a very cheap poor company, "So, you need to pay attention to price, which is also part of the cycle."

He added, "In other words, there is a new significant technology that will undoubtedly change the world and succeed. But some people confuse this with investment success."

“This is a classic question: when asset prices are high and interest rates begin to rise, the market becomes dangerous. So we must pay attention to interest rates and the pricing of these assets, and you must think about where to go next,” Dalio said.

The purest way to store wealth is Gold.

Dalio further pointed out that diversification is very important. "In the current market, everyone is leveraging long positions, thinking that asset prices will continue to rise, but the market will not always follow everyone’s expectations... The entire world is in a high-leverage state. If you want to go long, you need to pay equal attention to the correlation between Assets."

Dalio emphasized the importance of investing in those Assets that cannot be harmed by currency depreciation and can even benefit from it. Gold is one of these, as it is a necessary "low-correlation asset" in a diversified portfolio and represents the "purest way to store wealth."

Dalio believes that Gold has several unique advantages: it can flow freely between countries; central banks hold it as a reserve Asset; it is regulated more difficultly than Bitcoin, allowing for a more "private" Hold; and governments cannot easily tax Gold, but Bitcoin is different—governments know the trading paths of Bitcoin, making it easy to regulate and tax.

"When you add these Assets to your portfolio, it effectively reduces overall risk. In such an environment, low-correlation Assets are necessary to pay attention to. These Assets can be viewed from a geographical perspective or from an asset class perspective; this is part of portfolio construction," Dalio said.

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