New Delhi, Sept. 23 -- Artificial intelligence could create productivity breakthroughs in history and, at the same time, fuel a damaging investment bubble, according to Ray Dalio, a billionaire investor and the founder of Bridgewater Associates.

Speaking in a video published by the World Economic Forum (WEF), Dalio said the debate over whether AI will transform the economy or pose serious risks overlooks that both outcomes could occur simultaneously.

Dalio argued that transformative technologies typically attract substantial investment because businesses and investors expect them to change the world. That enthusiasm can then lead to overinvestment, rising debt and eventually a bubble-and-bust cycle.

"There's a process in which great ne...