Billionaire investor Ray Dalio warns the U.S. won’t ‘be competitive in manufacturing with China in our lifetime’

March 4, 2025

1 3 minutes read

Ray Dalio argued China will continue to have the leg up on the U.S. in AI chip manufacturing for the foreseeable future. “We’re not going to have competitive advantages in those things,” the billionaire told Tucker Carlson last month. However, the U.S. will likely hold the edge in the AI development race in innovation and research, Dalio said.

The U.S. may have the brains in leading AI chip development globally, but China will continue to have the brawn to manufacture applications for those chips, and that won’t change anytime soon, billionaire investor Ray Dalio says.

China has the edge over the U.S. in mass-producing semiconductor chips and generating ways to apply AI, even though U.S. chips are slightly more effective, the Bridgewater Associates founder explained on an episode of the Tucker Carlson show last month.

“We design chips, but we can’t produce chips effectively. By and large, we can’t produce things—any manufactured goods—as cost effectively,” Dalio said.

Instead, the U.S. advantage in AI chip development rests in its continued investment in higher education and research, which has attracted a global workforce, he argued.

“If we could work well together in that inventiveness—with rule of law working and all of that working—we have those things that are our competitive advantage,” Dalio added. “We do not have manufacturing, and we’re not going to go back and be competitive in manufacturing with China in our lifetimes, I don’t believe.”

The AI development war between the U.S. and China has been heating up. In January, Chinese dark horse developer DeepSeek unveiled an open-source model claiming to be faster and far cheaper to produce than OpenAI’s o1 model. DeepSeek’s assertions—though some experts question them—are in spite of the Biden administration’s sweeping export controls designed to restrict access to key chip manufacturing equipment and curb domestic chip production.

The U.S. has pushed to ramp up chip manufacturing at home. The Taiwan Semiconductor Manufacturing Co. (TSMC), which produces most of the world’s advanced semiconductor chips, is poised to announce a $100 billion investment in U.S. chip plants, according to multiple reports, part of President Donald Trump’s plan to push the U.S. ahead of AI competition.

Dalio called AI a “war no country can lose” in January, with winning “more important than profits,” he told the All-In podcast.

While China’s chipmaking efforts tend to result in semiconductors with small deficiencies compared to U.S. technologies, those chips are still significantly less expensive compared to their American counterparts—and China will likely shift its focus to AI applications, Dalio said.