Bridgewater Associates founder Ray Dalio stated in a podcast that the current AI craze is showing "classic bubble signs." He pointed out that the current cyclically adjusted price-to-earnings (CAPE) ratio has reached 42.6, surpassing the peak of 32.6 before the 1929 Great Depression, and approaching the 44.2 seen during the 2000 dot-com bubble (which led to a 75% evaporation of the Nasdaq index's value). Dalio warned that AI valuations are creating "paper billionaires" with insufficient actual cash backing, and once confidence collapses, asset values could shrink significantly while debts remain. He also linked the high concentration of wealth brought by the AI boom to the increasing political instability in Western democracies.