Artificial intelligence has become a buzzword on Wall Street in the last year and the source of widespread fear, but legendary investor Ray Dalio says its benefits could be “exciting.”
Dalio founded Bridgewater Associates in the 1970s and built it into the world’s largest hedge fund. The world is on the cusp of a variety of “tremendous disruptions,” he told the Milken Institute’s Asia Summit on Thursday.
He listed five “issues of our time” that he believes will interact and change the way the world works: unprecedented debt creation, internal political conflicts in countries like the United States, the changing world order, climate change and technology breakthrough.
When it comes to the latter, AI will be a major transformative force, Dalio said, describing the technology as “just like nuclear, only more powerful.”
“In terms of productivity, it could be exciting,” he predicts. “There will be robots with artificial intelligence – you’re almost creating people. If managed well, I think the work week could be reduced. Maybe… the work week will become about three days.”
However, he warned that only a subset of society would see the benefits of the changes unless intervention was taken.
“The issue will be a debate about what to do and how to do it,” he said, noting that as AI disrupts the job market, some workers will find themselves of little use in the new economy, while others will still be eliminated. “Do it with your heart.”
“This will have a huge wealth impact,” he said.
since amazing rise OpenAI’s generative AI chatbot ChatGPT, billions of dollars have invested in the development of artificial intelligence.However, the boom in artificial intelligence has prompted warnings that millions of workers could be replaced by machines, which could boost corporate profits but The gap between rich and poor is widening.
Needs thoughtful policymakers
Dalio said at a Milken Institute event last week that policymakers and other stakeholders involved in the implementation of artificial intelligence need to be careful that the potential benefits of the technology do not exacerbate inequality.
“With productivity (benefits), decisions have to be made on how to share that productivity,” he said.
Dalio said reforms are needed to ensure that all the looming social disruption does not exacerbate wealth inequality. However, he does not seem confident that this can be achieved in the current political climate.
“There is only one prospect: there must be a strong centrist, preferably a leader of a strong centrist,” he said. “There should be a president with a bipartisan cabinet. And then there needs to be major reforms, changes to the system to make it productive for the most people.”
He added that there should be a “bipartisan equivalent of the Manhattan Project” – Secret Projects During World War II Witnessed the development of the world’s first atomic bomb – and proposed a plan for reform.
“Because it’s bipartisan, they might be able to pass it,” he said. “None of that is possible now because bipartisanship (in the United States) is really about some fighting for them (themselves) and it’s victory at all costs. In fact, there will be no winner because one side can’t beat the other .”
How should investors prepare?
When asked how investors can prepare for changes in the world order, including the impact of artificial intelligence, Dalio said it was important to look beyond the companies directly affecting this shift.
“Using new technology is like experiencing a time warp. We will enter a different world, and disruptors will be disrupted,” he said. “I don’t need to pick the people who create the new technology. I need to really pick the people who use the new technology in the best way.”
He added that he didn’t want to “own debt, bonds and whatnot” because of uncertainty about debt supply and demand.
Dalio thinks cash is a good place to be “for the time being,” but noted: “I don’t think cash is going to last because of the issues we’re talking about.”
Hedge fund investors own Estimated net worth $16.5 billionresigned as CEO of Bridgewater Associates in 2017 and fully Give up control of company last year.
Dalio is known for managing assets at Bridgewater Associates, which he founded from his New York City apartment. Valued over $120 billion.
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