Ray Dalio: AI Will Replace Human Decision-Making in Investing

In his book – How Countries Go Broke, Ray Dalio says. “It looks to me like we are now at the brink of a new era in which machine thinking will supplement or surpass human thinking in many ways”, comparing this moment to the Industrial Revolutions.

“Just as we saw that doing math in our heads and remembering facts became much less important with the invention of computerized tools that do these things… we will soon be going to computers to get our instructions on what to do… because the computer will come up with better guidance more quickly than we can.”

Dalio’s perspective is grounded in firsthand experience. “I and Bridgewater have been doing AI investing through expert systems for decades… The days of people making decisions in their own heads are ending.” His tone is one of enthusiasm: “I’m excited by what will be happening.”

What’s coming is not just evolution—it’s revolution. “Over the next five years, we will see dramatic advancements in most areas. Creating the AI capabilities is just the beginning of the AI applications.” The opportunity set is vast. “The opportunities that are being developed are nearly unbelievable.”

Dalio sees a clear divide forming between those who adapt and those who don’t. “There will be exceptionally big differences between the performance levels of countries, investors, and companies who use [these technologies] well. Those who know how to use these tools effectively will be rewarded, and those who fail to do so will be penalized.”

He’s quick to point out the global implications. “The US and China are now the main competitors in designing these powerful new technologies, and how effective they are will have big impacts on their economic and military powers.” Each country has strengths: “The US is ahead of China in developing the most advanced semiconductor chips… China is close behind… and ahead in deploying AI.”

But Dalio is realistic about the challenges of defending innovation. “I keep in the mind the principle that by and large, intellectual property protections don’t work… anything that is openly used can almost instantly be replicated… most good ideas that are openly shown and are liked a lot will be replicated in about six months.”

Still, he remains optimistic. “I am very excited and optimistic about the revolutionary improvements… perhaps most importantly, these new AI technologies.” He adds a note of caution: “Of course, new technologies are double-edged swords… they have advanced how we can do each other harm as well as how we can do each other good.”

You can find the book here:

Ray Dalio – How Countries Go Broke: The Big Cycle (Principles)