The Gulf region is attracting huge AI investment and could rival Europe, according to LondonInsider data.

The Middle East is rapidly positioning itself as a leading hub for artificial intelligence, according to Bridgewater Associates founder Ray Dalio.

Speaking to CNBC, Dalio highlighted how the United Arab Emirates and neighboring countries have successfully combined vast financial resources with an influx of international talent.

This combination, he said, is attracting investors, AI innovators, and tech professionals to the region at an unprecedented rate.

Both the UAE and Saudi Arabia have launched multibillion-dollar initiatives this year to expand cloud infrastructure, data centers, and other AI-related projects, as reported by LondonInsider.

These initiatives are backed by sovereign wealth funds and partnerships with global technology firms, aiming to make the region a major player in AI development.

A notable development is the $10 billion agreement between Google Cloud and Saudi Arabia’s Public Investment Fund, which seeks to create a “global AI hub” and host AI workloads and data centers locally.

Earlier this year, OpenAI, Oracle, Nvidia, and Cisco joined forces to establish the Stargate AI campus in the UAE, a major step in consolidating the region’s tech capabilities.

When asked whether the UAE, Saudi Arabia, and Qatar could lead the AI race, Dalio said, “What they’ve done is to create talented people. So this [region] is kind of becoming a Silicon Valley of capitalists … So now people are coming in … money is coming in, talent is coming in.”

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Dalio Highlights Gulf’s Strategic Planning

Dalio, who has visited Abu Dhabi for more than 30 years, credited the Gulf’s rapid transformation to careful statecraft and long-term planning.

He described the UAE as “a paradise in a world that’s troubled,” praising its leadership, stability, quality of life, and ambition to build a globally competitive financial ecosystem.

“There’s a buzz here, the way there’s a buzz in San Francisco, places like that, about AI or technology. It’s very similar to that,” Dalio said.

The founder sees the Gulf’s AI developments as part of a broader strategy to combine wealth and talent, creating an environment comparable to major global tech centers.

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Global Economy Faces Precarious Period

Dalio also expressed concerns about the global economy, predicting a challenging period in the next year or two.

He highlighted the convergence of three dominant cycles: rising debt, U.S. political conflict, and geopolitical tensions.

“The next year or two in the future is going to be more precarious,” he said, noting that global debt pressures are already affecting markets.

Dalio pointed out cracks appearing in private equity, venture capital, and debt refinancing, emphasizing that “we are in a bubble, I believe, by almost all of those measures.”

He compared the current situation to the tech bubble of 2000, but not to the 1929 crash, suggesting caution but not panic.

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U.S. Political Risks and Fiscal Constraints

Dalio warned that U.S. politics could become increasingly disruptive leading up to the 2026 elections.

“As we go into the 2026 elections … you will see a lot more conflict in different ways,” he said.

He noted that elevated interest rates and concentrated market leadership increase economic vulnerability.

“Every country … cannot continue to accumulate the debt they have, yet politically they can’t raise taxes and they can’t cut benefits. So they’re stuck,” Dalio said.

This fiscal bind, he explained, feeds domestic polarization, creating “irreconcilable differences” between left- and right-wing populism.

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AI Market and Investment Advice

Dalio emphasized that while the AI rally shows bubble-like characteristics, investors should not exit prematurely.

“All the bubbles took place in times of great technological change,” he said.

He explained that the “pricking” of a bubble usually occurs due to tighter money or forced asset sales to meet obligations.

“You don’t want to get out of it just because of the bubble. You want to look for the pricking of the bubble,” Dalio added.

Recent months have seen similar warnings from other experts, including OpenAI CEO Sam Altman and investor Michael Burry, who predicted a potential AI market correction within two years.

Dalio also highlighted stress points in venture capital, private equity, and commercial real estate, where rolling over cheap debt at higher rates is creating financial strain.