Bridgewater Associates has warned that the rapid expansion of artificial intelligence spending is entering a “dangerous” phase, as large technology companies increasingly rely on external capital to fund rising costs, according to a report by Reuters. Greg Jensen, co-chief investment officer at the hedge fund manager, said investor concerns are growing over whether heavy AI investment will ultimately translate into sustainable profits. In a note to clients, Jensen said there is a “reasonable probability” that the market is moving towards a bubble, as spending requirements outstrip what companies can support through internal cash flows. Big Tech firms are increasingly turning to external financing to pursue AI ambitions, particularly to fund data centres and related infrastructure. According to UBS, AI-related data centre and project finance deals reached $125bn by November this year, up from $15bn over the same period in 2024. Market unease intensified following weaker-than-expected sales and profit guidance from Oracle last week.