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Nov 3 (Reuters) - Investors are overlooking mounting risks to the current market stability and the limits of the artificial intelligence boom, particularly in the United States, Bridgewater Associates' co-chief investment officers said in a note to clients on Monday. While major technology firms have poured billions into AI and its supporting infrastructure, it is still unclear whether those investments will generate the cash flows needed to sustain lofty expectations, they said. Sign up here. "U.S. equities are priced as though the favorable conditions that lifted all companies, not just tech, will persist," the investment firm's co-CIOs Bob Prince, Greg Jensen and Karen Karniol-Tambour said. "The growth expectations discounted today are about as optimistic as they've been in nearly 100 years, with the brief exception of the dot-com bubble," they said. Markets, however, have largely shrugged off worries about inflation, high interest rates, policy uncertainty from shifting trade dynamics and the second-longest federal government shutdown. "Despite the many potential sources of volatility in the world today, market measures of risk remain unfazed," Bridgewater co-CIOs said, adding that the current environment carries "an uncomfortably high probability of unknowable and extreme outcomes". Bridgewater, founded by billionaire investor Ray Dalio, is widely considered to be one of the world's most successful hedge funds. "AI infrastructure, including chips, buildings, routers and other networking gear, will become obsolete as the technology advances rapidly," said David Spreng, CEO at venture debt firm Runway Growth Capital. "I just don't think that AI infrastructure is a good bet from a venture debt perspective right now. The risks are not symmetrical." Reporting by Niket Nishant and Manya Saini in Bengaluru; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab Niket Nishant reports on breaking news and the quarterly earnings of Wall Street's largest banks, card companies, financial technology upstarts and asset managers. He also covers the biggest IPOs on U.S. exchanges, and late-stage venture capital funding alongside news and regulatory developments in the cryptocurrency industry. His writing appears on the finance, business, markets and future of money sections of the website. He did his post-graduation from the Indian Institute of Journalism and New Media (IIJNM) in Bengaluru. Manya reports on prominent publicly listed U.S. financial firms, including Wall Street’s biggest banks, card companies, asset managers, and fintechs. She also covers late-stage venture capital funding, initial public offerings on U.S. exchanges, and regulatory developments in the cryptocurrency industry. Her work appears in the finance, markets, business, and future of money sections of the Reuters website. A passionate reader, she loves books across genres, from classics to contemporary fiction. She holds an undergraduate degree in Political Science from the University of Delhi and a master’s in journalism from the Symbiosis Institute of Media and Communication.
