Billionaire Ray Dalio, speaking on DeepSeek, says Chinese AI strategy will rely on very inexpensive chips embedded in manufactured goods, and reiterates that AI is a war that no country can afford to lose

Billionaire investor Ray Dalio shared his thoughts on China’s approach to the AI arms race, suggesting the country will leverage its manufacturing capabilities like it did with electric vehicles, according to a report.

China's focus on affordable chips

Dalio said the Chinese play will be chips, reported Business Insider. According to him, China will focus on affordable chips which are embedded in manufactured goods such as robotics.

The investor emphasized that while China may lag behind in chip production, it’s ahead in AI applications.


Dalio pointed out the growing disruption in AI, with companies like Nvidia facing risks due to competition from Chinese startups like DeepSeek. "A great company that gets expensive is much worse than a bad company that's really cheap," quoted Business Insider.

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Global AI competition

DeepSeek has gained attention for its cost-effective AI model, which shook the tech world and caused major losses for companies like Nvidia, reported Business Insider.

The billionaire also described the global AI competition as a “war no country can lose,” highlighting the stakes of winning is more important than profits, as per the report.

Investors must be cautious

Dalio warned that many investors make the mistake of trying to buy “good” things from “great” companies. Reflecting on the dot-com bubble, he cautioned that the current valuations of AI and tech companies are something investors need to carefully consider.

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FAQs:

What is Ray Dalio's view on China’s AI strategy?
According to Dalio, China’s AI strategy will focus on producing low-cost chips embedded in manufactured goods, like robotics. While China may be behind in chip production, he thinks it's ahead in applying AI technology.

What is the dot-com bubble?
The dot-com bubble was a period in the late 1990s and early 2000s when excessive investment in internet-based companies led to inflated stock prices. The bubble burst in 2000, causing a massive market crash and the collapse of many tech startups.