Ray Dalio Highlights China's Lead in AI and Robotics Over the U.S.

Hedge fund manager and billionaire investor Ray Dalio has once again emphasized China's strength in artificial intelligence (AI) and robotics. He stated that China shows significant advantages in the field's application and implementation.

What’s Noteworthy: During a recent CNBC event called Converge Live held in Singapore, Dalio, founder of Bridgewater Associates, explained how the United States excels in designing high-quality semiconductor chips. However, he pointed out that the U.S. is falling behind in terms of mass production capacity.

Dalio noted, "The U.S. is uniquely competitive when it comes to inventing and creating the best chips. But when it comes to producing them on a large scale, we struggle." He further mentioned that while China is slightly behind the U.S. in chip technology, it overtakes the U.S. in chip production and in practical applications that utilize these chips.

According to Dalio, "China is ahead in applications, and they are effectively integrating chips with robotics, which gives them a significant edge." This insight underscores the evolving competitive landscape in technology, particularly in AI.

He also stressed that application and usage will be critical factors in defining future competition, highlighting the urgent need for the U.S. to enhance its capabilities.

Historical Context: This viewpoint is not new for Dalio. He previously highlighted similar concerns in January during a discussion with David Friedberg on the All-In Podcast. At that time, he pointed out that although China is behind in chip development, it leads in actual applications.

Adding to the competitive discourse, Dalio referenced the Chinese AI startup DeepSeek, which gained attention for ranking number one on the Apple App Store. He noted how this achievement reflects the rapidly evolving competitive dynamics in the AI space.

Furthermore, Dalio raised concerns about supply and demand issues affecting the U.S. economy. He argued for the necessity of reducing the U.S. deficit to a manageable 3% of Gross Domestic Product (GDP) in order to strengthen the economic position.

Market Response: Following Dalio's remarks, both the SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust ETF (QQQ) saw gains during premarket trading. The SPY increased by 0.81%, reaching $560.42, while the QQQ rose by 0.95% to $476.10, according to market data from Benzinga.

AI, China, Investing