Key facts
- Ray Dalio warned of a $4.4 trillion fight for capital by 2027.
- He cited increasing debt supply from AI hyperscalers and governments.
- Net corporate debt issuance is expected to rise to $1.4 trillion by 2027.
- Tech companies' bond issuance reached $220 billion in early 2026.
- Dalio stated that higher borrowing is leading to declining free cash flow.
Ray Dalio, founder of Bridgewater Associates, has warned that the market is heading towards a significant battle for capital, projected to reach $4.4 trillion annually by 2027. He attributes this to a growing supply of debt from both AI hyperscalers and governments, which he believes will lead to lower prices and higher yields on financial assets. Dalio's concerns are echoed by the International Monetary Fund, which noted that competition between tech companies and sovereign debt issuers could drive up government bond yields. He previously forecast a US debt crisis within the next two years, and his current thesis now incorporates the surge in AI-linked debt. Dalio observed that the market is tightening as investors demand greater concessions to absorb the increased supply, with net corporate debt issuance expected to rise substantially. He highlighted that tech companies' bond issuance has nearly doubled from 2025 to early 2026, contributing to pressure on markets. Economists like Torsten Sløk of Apollo have also pointed to Big Tech's borrowing spree as a factor.