Ray Dalio and Salesforce’s Benioff on AI, trade wars and new world order

60% of the US population is relatively unproductive and the debt crisis will create second-order consequences if the government cuts social programs (food assistance, school lunch programs) without addressing the underlying productivity problem, affecting high school dropout rates already at 22% in Connecticut (the second-richest state).

“there are many unproductive people and because they're unproductive then they don't have the income and so on and we have an issue and that big social issue is important so I think the question is above all else you know I don't know if we it's always better to have better health care and better all the things that are going to come about that but so much depends on how we're going to be with each other... so many of the actions that are taken now have these second order consequences the state of Connecticut which um is the richest second richest state in the country 22% of the high school students have either dropped out of high school or or are um um failing with absentee rates of greater than uh 25% so you have a situation and and now we're going to cut off food programs School of lunch programs and so on in very big movements how do you deal with such a complex mess of unproductive activities and all of these things”

The US is experiencing a transition in its internal political order because the left and right have reached irreconcilable differences over money and values, which historically leads to internal conflict and change.

“the second is that there's an internal political order and then that cycle there there's the left and the right and when it gets to the point where there are irreconcilable differences over money and values then there is a fight and that is the internal order so we are about we are changing internal orders”

Climate events and natural disasters (droughts, floods, pandemics) have killed more people and toppled more orders throughout history than wars have.

“the fourth force is um actually having a bigger impact killed more people than Wars and so on is climate and act of nature droughts floods and pandemics have killed more P people than Wars and toppled more orders”

The United States faces an imminent supply-demand debt crisis: the federal deficit must be reduced from a projected 7.2% of GDP to approximately 3% of GDP, otherwise there will be a severe supply-demand problem with Treasury debt that the world will not want to buy.

“the debt issue we we have a very severe Supply demand problem so that they have to sell a quantity of debt that the world is not going to want to buy and that's a set of circumstances that is imminent okay that's that's that's Paramount importance the deficit must go from what will be projected now uh to be about 7.2% of GDP to about 3% % of GDP otherwise there will be a supply demand problem okay that's a big deal”

Data center prices have never been lower due to huge multi-hundred billion dollar weekly data center investments by hyperscalers competing with each other, creating a commodity market where software companies like Salesforce can deploy at very low cost regardless of provider (Alibaba, Amazon, Google, or others).

“we have all heard about these multi hundred billion doll data center Investments every week there's another another multi hundred billion dollar data center investment happening and um we have not been doing that we're we're a software company so we're all about building that software over the last 26 years to run on those data centers and we've just never seen prices this low for deployment because it is a huge level of investment and when you get this huge level of investment it drops prices and that means that for us we're able to run and deploy at a very low cost and it's a commodity product you know data center against a data center against the data center a chipset against G chipset against the chips SEC these are fundamental you know Commodities”

Connecticut, the second richest state in the country, has 22% of high school students who have either dropped out or are failing with absenteeism rates greater than 25%, illustrating a structural productivity crisis even in wealthy regions.

“the state of Connecticut which um is the richest second richest state in the country 22% of the high school students have either dropped out of high school or or are um um failing with absentee rates of greater than uh 25%”

The super-scaler hyperscalers competing in data centers will not be the companies making the most money from AI; instead, the companies that capture and benefit from AI usage will be the primary beneficiaries.

“the hype the super scalers it's not going to be the Super scalers I think that are going to make all that money they just think I need a better on AI it's the usage are there any companies”

Tariffs will cause fighting and conflict between countries (not necessarily military, but broader conflict), and this conflict will have significant consequences that deserve primary attention.

“tariffs are going to cause fighting between countries I'm not what type of fighting I'm not going to maybe it's military but I'm not necessarily talking about military but think about us Canada Mexico China and all of those types of fighting there will be fighting and that will have consequences and I think that's the main thing to pay attention to”

The reciprocal tariff approach is conceptually good in principle because it creates clarity (if one country treats you one way, you treat them the same way), but the implementation ('how') matters enormously and can result in high volatility and conflict if unclear or inconsistent.

“you know so you have like Clarity like if one country is treating you this way you're treating that country with the same reciprocity so you're on board but but it's the how also and the how is very important and you've got to put the what and the how together and if you can't put the what and the how in a consistent clear and meaningful way then you could end up with high levels of volatility and conflict”

Fiscal consolidation from 7.2% to 3% deficit-to-GDP can be achieved without recession if done correctly, as demonstrated by the 1992-1998 period, through balancing three influences: spending, tax revenue, and interest rates.

“can they do that without taking us into recession uh yes if you look at how that happened in the 1992 to 98 period and so on there were three influences on this there's the there's the spending there's the taxes and taxes means tax revenue not tax rates and then there's also interest rates”

Cutting social programs and safety nets without addressing underlying low productivity will create second-order consequences that undermine the fiscal reform effort, including increased unrest among the 60% of the population that depends on these programs.

“so many of the actions that are taken now have these second order consequences the state of Connecticut which um is the richest second richest state in the country 22% of the high school students have either dropped out of high school or or are um um failing with absentee rates of greater than uh 25% so you have a situation and and now we're going to cut off food programs School of lunch programs and so on in very big movements how do you deal with such a complex mess of unproductive activities and all of these things”

When great new technologies emerge (dotcom era, industrial revolutions), people get excited and ignore price valuations, buying overpriced stocks in great companies; it is better to buy bad companies at cheap prices than great companies at expensive prices, which creates a boom-bust cycle.

“what happens is one when we call hype throughout the industrial revolutions throughout history through the do com bub period and the do com bubble there are new technologies that are remarkable and reshaping the world and then people get excited about those and they don't pay attention to prices that they think that because it's a great new technology I have to own it and everybody else owns it and because of that they don't pay attention to price and so this looks very much like 1998 99 to me in a sense of think about that digital Revolution wow that was fantastic and it continues on but it's it's better to buy a Bad Company stock in a bad company at a cheap price than it is to buy stock in a great company at an expensive price”

New technologies including AI can be weaponized, and AI weapons systems will need to make decisions at speeds faster than human cognitive capacity, creating risk that such systems will be deployed before governance frameworks exist.

“the new technologies AI um Technologies are going to me be able to be used for weapons and those decisions are going to have to take place in a speed that's faster than human's capacity to think so these things are going to be let loose on each other”

The geopolitical order is changing from one that was unilaterally controlled by the United States to something very different, as rising powers challenge existing declining powers and change the rules that were set by the winners of the last war.

“the third is uh the geopolitical order in other words how does the work what are the rules of the world of how countries interact and who determines that it's determined by the winners of the last war they set out the rules and they have the system but there's a change in the world order as rising Powers challeng existing declining powers and so we are seeing that change in the world order from one that was unilaterally really largely controlled by the United States to something that's very different”

Government actions and policies taken to address deficit and waste often have significant second-order consequences that can exacerbate social problems if not carefully considered.

“so many of the actions that are taken now have these second order consequences”

When countries face a supply-demand imbalance in debt markets, historical precedent shows they resort to debt restructurings, political pressure on other countries to hold debt, cutting payments to creditor countries, and monetization of debt—not typically austerity or spending cuts.

“there may be restructurings of debt there may be exerting pressures on countries to own the debt to buy the debt political pressures on countries there may be cutting the payments of to some creditor countries off for political reasons and so on so there may be monetizations of debt if you look at history and see the repeating of what do countries do when they're in this kind of situation there are lessons from history that repeat”

Dalio does worry about the global economy as a result of trade barriers, debt sensitivity, and political tensions, but he emphasizes that history shows major countries can suffer while neutral countries do extremely well during periods of global conflict by attracting capital and people and navigating skillfully.

“do I worry about the global economy do I worry about the global economy the global economy as a result of all the trade barriers um of course I worry about the global economy and our Global well-being because of the sensitivity of interest rates the debt situation how we're dealing with the each other but I also should emphasize that in history you can see that um there are the major countries and then there are the neutral countries and the neutral countries do extremely well during these periods of time they get um people and capital that go to them they are able to navigate in a certain way the making of great prosperity and so on it doesn't affect the whole world it's and there are beneficiaries of this too like Singapore if if it remains a neutral country and it's a very difficult thing to do and it operates this way then there becomes great opportunities”

The federal government has a 'terrible waste' problem, and while waste elimination is possible, it comes with substantial second-order consequences that may harm vulnerable populations (food programs, school lunch programs, etc.), making complex policy changes difficult in 100 days.

“if we can eliminate waste there's terrible waste in the government and there's terrible waste in our society... so many of the actions that are taken now have these second order consequences... now we're going to cut off food programs School of lunch programs and so on in very big movements how do you deal with such a complex mess of unproductive activities and all of these things in the first 100 days”

There is a significant internal productivity and educational crisis in the US where approximately 60% of the population has reading levels below sixth grade and is relatively unproductive, creating a large social underclass living on government support.

“when we look at the United States or a country we look at it as a whole we don't realize the differences and what in a country of 330 million people 1% 3 million people are responsible for most of the changes... then the other top 10% is those around them who then do well that next 30% is doing okay and the bottom 60% has a reading level that's below sixth grade and is not productive there are many unproductive people and because they're unproductive then they don't have the income”

Historical precedent shows that legal systems may not hold up well during major world order transitions, and Dalio would not be surprised if the US legal system experiences significant strain.

“this movement to a confront ational um big changes in the world order... will lead to change questions how does the legal system work and so on so but if you have to read history and you see these things so would I be surprised if the legal system didn't hold up well no I wouldn't be very surprised”

There are five forces that drive changes in world order: debt and money cycles, internal political order, geopolitical order, climate and natural events, and human technological inventiveness, and these forces interact to create big cycles that transition from one order to another.

“there are five forces that drive that over that period of time those forces are there's a debt money Force economic force and how that works... the second is that there's an internal political order... the third is uh the geopolitical order... the fourth force is um actually having a bigger impact killed more people than Wars and so on is climate and act of nature... the fifth force is um man's inventiveness particularly of new technologies”

There are five forces that drive transitions between world orders: debt-money cycles that increase until unsustainable, internal political polarization over money and values leading to civil conflict, geopolitical order changes as rising powers challenge declining powers, climate and natural disasters (which have killed more people and toppled more orders than wars), and technological innovation particularly AI.

“there are five forces that drive that over that period of time those forces are there's a debt money Force economic force and how that works so there's a big cycle of increasing debt relative to incomes until you can't do that anymore and we have a big monetary issue that is going to lead to a big change in the monetary order that we're now facing the second is that there's an internal political order and then that cycle there there's the left and the right and when it gets to the point where there are irreconcilable differences over money and values then there is a fight and that is the internal order... the third is uh the geopolitical order in other words how does the work what are the rules of the world of how countries interact and who determines that it's determined by the winners of the last war they set out the rules and they have the system but there's a change in the world order as rising Powers challeng existing declining powers... the fourth force is um actually having a bigger impact killed more people than Wars and so on is climate and act of nature droughts floods and pandemics have killed more P people than Wars and toppled more orders and certainly that's a big force and through history the fifth force is um man's inventiveness particularly of new technologies”

The US federal government faces an imminent debt supply-demand crisis where it must sell large quantities of debt that the world market will not want to buy at current prices if the deficit remains above 3% of GDP.

“the debt issue we we have a very severe Supply demand problem so that they have to sell a quantity of debt that the world is not going to want to buy and that's a set of circumstances that is imminent okay that's that's that's Paramount importance the deficit must go from what will be projected now uh to be about 7.2% of GDP to about 3% % of GDP otherwise there will be a supply demand problem”

The fiscal deficit reduction must happen in the first 100 days of an administration because if it does not happen immediately, it will not happen, making the timing and speed of implementation critical.

“how do you deal with such a complex mess of unproductive activities and all of these things in the first 100 days of an administration because you have to make the changes in the first 100 days of an administration because you have to make the changes in the first 100 days are you're not going to make it”

Salesforce's large customers are actively deploying agentic AI applications, demonstrating that value is moving beyond hype into implementation phase.

“our big customers here in Singapore are deploying agents... when when I see our large customers deploying these Technologies it it's very exciting to me because you know what we like to do is really go from the hype cycle and then deliver the value cycle”

Robot workers deploying in restaurants represent a concrete example of digital labor taking hold in real-world commercial applications.

“I've already seen it I was in a restaurant which was had incredible robot workers that's an example of digital labor”

Salesforce positions itself at the intersection of digital labor innovation and AI, building software over 26 years to run on commodity data center infrastructure, avoiding capital-intensive data center competition.

“we're we're a software company so we're all about building that software over the last 26 years to run on those data centers and we've just never seen prices this low for deployment because it is a huge level of investment”

The current AI valuation situation resembles 1998-99 during the dot-com bubble, where high prices create a precarious situation intersecting with a broader troubled world economy affected by the other four forces (debt, political instability, geopolitical conflict, climate).

“this looks very much like 1998 99 to me... you have this you have this bubble developing in a precarious World economy that has the effects that you're seeing it doesn't mean that technology is bad it just means we have the other four forces that are bad and we have high prices”

Neither the US nor China has a significant unilateral leading edge in AI; both have different approaches, different chip strategies, and no monopoly on training or inference chips.

“I think that both have different approaches right now because you know I I wouldn't say that the United States has a significant Leading Edge you just saw one of the leading uh models which was deep seek emerge but also now as I mentioned alibaba's model as well and there's other models as well and there's different approaches with chips so while there are us chips that are very good and very competitive as we saw in the training of the deep seek model there's different approaches with chips and that there is nobody has a mon Monopoly on training chips or on inference trips”

The digital labor and robotic age is central to the future, involving agents, digital agents, agentic AI systems, and robotics, and the critical competitive question is who will manufacture the robots—an area where China has been particularly impressive.

“we're moving into the digital labor Revolution it's this3 to 12 trillion opportunity it involves agents and digital agents in a gentic age but it also Behold a robotic age and in the robotic age who is going to make the robots I think that that's very impressive what the Chinese have been able to do with this robotic age so the robots the agents AI this is all part and parcel of the future”

Current AI stock valuations resemble the 1998-99 dotcom bubble period, with high equity prices relative to bonds and rising interest rates likely to pressure valuations, creating a precarious situation in a world with other structural problems (debt, geopolitics, climate).

“the pricing of equities in many of these cases is um High relative to bonds expected to you have a rise in interest rates so when we're looking at it also uh let's say the hype the super scalers it's not going to be the Super scalers I think that are going to make all that money they just think I need a better on AI it's the usage... you have this you have this bubble developing in a precarious World economy that has the effects that you're seeing it doesn't mean that technology is bad it just means we have the other four forces that are bad and we have high prices”

Tariffs will cause conflict between trading nations (US-Canada-Mexico-China and others), with consequences that may or may not be military but will certainly involve fighting and disputes with material impacts on the global economy.

“tariffs are going to cause fighting between countries I'm not what type of fighting I'm not going to maybe it's military but I'm not necessarily talking about military but think about us Canada Mexico China and all of those types of fighting there will be fighting and that will have consequences”

Every member of Congress and the President should make a public pledge to achieve 3% budget deficit-to-GDP as a binding political commitment, regardless of how it is achieved.

“I just want to say it's very simple 3% of GDP if they don't get to 3% of GDP a budget deficit of 3% of GDP we're going to have a problem okay now how they do it that that's a different question they have political problems I think every member of Congress and the President should say 3% of GDP and we have a pledge One Way Or Another We're going to get the 3% of GDP”

The United States is experiencing a transition in its internal political order, driven by irreconcilable differences between left and right over money and values, analogous to historical transitions that often result in conflict.

“the second is that there's an internal political order and then that cycle there there's the left and the right and when it gets to the point where there are irreconcilable differences over money and values then there is a fight and that is the internal order so we are about we are changing internal orders”

The productivity and wealth benefits of new technologies like AI are being captured disproportionately by top earners: in a 330 million person country like the US, the top 1% (3 million people) responsible for most changes are innovators at top universities creating unicorns, the next 10% do well, the next 30% are okay, but the bottom 60% have reading levels below sixth grade and are relatively unproductive.

“when we look at the United States or a country we look at it as a whole we don't realize the differences and what in a country of 330 million people 1% 3 million people are responsible for most of the changes if you were to look at that they are the ones who go to the great universities and they're innovators and they make the unicorns and so on then the other top 10% is those around them who then do well that next 30% is doing okay and the bottom 60% has a reading level that's below sixth grade and is not productive”

Interest rate costs are approximately 1 trillion dollars per year in US government spending, so lowering interest rates through improved debt supply-demand balance has enormous fiscal impact and is a key lever in deficit reduction.

“the interest rate cost is about a trillion dollars a year okay so interest rates have a big effect if you improve the supply demand balance you will lower the interest rates and you'll also build a confidence and so on”

The Clinton Administration delivered a balanced budget, which is offered as an example that deficit reduction is politically possible and has been done before.

“the Clinton Administration delivered a balanced budget”

The deficit can be reduced from 7.2% to 3% of GDP without causing recession if three policy levers are used correctly: (1) controlling government spending, (2) increasing tax revenue (not just tax rates), and (3) managing interest rates—as demonstrated in the 1992-1998 period.

“can they do that without taking us into recession uh yes if you look at how that happened in the 1992 to 98 period and so on there were three influences on this there's the there's the spending there's the taxes and taxes means tax revenue not tax rates and then there's also interest rates and what'll happen if they do that right program you're going to have lower interest rates”

Both the US and China have different approaches to AI; the US does not have a significant leading edge, as demonstrated by the emergence of DeepSeek and Alibaba models from China, and neither country has a monopoly on training or inference chips.

“I wouldn't say that the United States has a significant Leading Edge you just saw one of the leading uh models which was deep seek emerge but also now as I mentioned alibaba's model as well and there's other models as well and there's different approaches with chips so while there are us chips that are very good and very competitive as we saw in the training of the deep seek model there's different approaches with chips and that there is nobody has a mon Monopoly on training chips or on inference trips”

Technology, particularly the shift to digital labor and AI, operates as a continuum that cuts through and influences all world order transitions and can provide productivity gains across geopolitical and economic turmoil.

“I think you have to look at it also that technology is the Continuum that slices through all of that the next wave is the biggest most exciting wave of technology in the history of Technology it is the shift to digital labor it is the three 3 to 12 trillion Global shift where we are going to see digital ler take over”

A big monetary issue driven by unsustainable debt-to-income cycles will lead to a major change in the monetary order we currently face.

“there's a big monetary issue that is going to lead to a big change in the monetary order that we're now facing”

Within a country of 330 million people, 1% (3 million people) are responsible for most major economic and innovative changes, including creating unicorns and attending great universities.

“we have a b we have a big issue in terms of when we look at the United States or a country we look at it as a whole we don't realize the differences and what in a country of 330 million people 1% 3 million people are responsible for most of the changes if you were to look at that they are the ones who go to the great universities and they're innovators and they make the unicorns and so on”

For every member of Congress and the President, the target should be pledging to achieve a budget deficit of 3% of GDP and committing to achieve it by whatever means necessary ('One Way Or Another').

“every member of Congress and the President should say 3% of GDP and we have a pledge One Way Or Another We're going to get the 3% of GDP”

The how of policy implementation—the specific methods, speed, and narrative framing—can be surprising and even entertaining but is ultimately distinct from the what (policy goal), and execution varies across administrations.

“the how can be um you know presented in different ways and the how can be also about speed the how can be also about oratory about narrative and some asp ects of the how are definitely surprising some of them are entertaining but I say that from the first Trump Administration we know you can't expect or under know what the how is going to be”

Salesforce's model is to move from the hype cycle to the value cycle by delivering concrete productivity gains and demonstrating clear ROI; this approach of showing actual results differentiates them from companies still in the hype phase.

“we like to do is really go from the hype cycle and then deliver the value cycle and really show okay this is how you're really going to deliver”

Reciprocity in trade policy (treating countries the same way they treat you) can be beneficial, but the critical factor is how the policy is implemented—if the what and how are not put together in a clear, consistent, and meaningful way, the result will be high volatility and conflict.

“it's about the the what and the how you know and the what is yes do I believe reciprocity is good reciprocity can be very good you know so you have like Clarity like if one country is treating you this way you're treating that country with the same reciprocity so you're on board but but it's the how also and the how is very important and you've got to put the what and the how together and if you can't put the what and the how in a consistent clear and meaningful way then you could end up with high levels of volatility and conflict”

The first Trump administration's policies were unpredictable in their specific implementation ('the how'), making it impossible to forecast exact outcomes while the general direction was predictable.

“from the first Trump Administration we know you can't expect or under know what the how is going to be that's exactly right”

Salesforce believes the next generation of work will involve employees working hand-in-hand with AI agents and robots, and Mark Benioff will be the last CEO/COO of Salesforce who only managed humans.

“robotic age means for the workforce that we are going to work hand inand with agents and robots I've told my employees my customers I'll be the last COO of Salesforce who only managed humans”

Microsoft disappointed many companies because while it started with co-pilot, it did not deliver the value it promised initially, but now real value is emerging in agentic applications.

“when we look at the last few years the hype I mean honestly Microsoft has really disappointed so many companies they kind of started with you know co-pilot but they've really not found the value that they want to get to with AI but now we're really seeing that happen with the agentic uh vision of the world”

The Trump administration has moved quickly to confront geopolitical and world order issues, which fits a pattern where these changes were 'baked in' (inevitable) and the speed of execution is addressing them directly.

“they're getting at it fast and so this movement to a confront ational um big changes in the world order I think has been baked it's going to happen and the fact that they're operating so quickly to that and that'll lead to change”

China will likely respond to US tariff increases (20% tariffs mentioned) by leveraging its advantages in manufacturing, chip production integration, and robotics, rather than through tariff retaliation.

“where do you think this is going Ray we just took up tariffs 20% on China from the United States how do you think they're going to deal with that and also the coming technology battle”

Dalio was surprised by how quickly the new administration is moving toward confrontational positions and large changes in world order, and expects such rapid speed to lead to questions about whether legal systems and institutions can withstand the pace of change.

“they're getting at it fast and so this movement to a confront ational um big changes in the world order I think has been baked it's going to happen and the fact that they're operating so quickly to that and that'll lead to change questions how does the legal system work and so on so but if you have to read history and you see these things so would I be surprised if the legal system didn't hold up well no I wouldn't be very surprised”

The robotic age will transform the workforce such that future COOs will not manage only humans but will manage humans, agents, and robots in integrated teams.

“I've told my employees my customers I'll be the last COO of Salesforce who only managed humans”

At Salesforce, the shift to digital labor is being operationalized through deployment of AI agents and agentic layers, which are robotic manifestations of software that the company's large customers in Singapore are already deploying.

“so digital labor is part of what is going on in the world today and at Salesforce that also means a agents an a gentic layer which is that these robots are manifestations of software and our big customers here in Singapore are deploying agents”

Super-scaler companies (large data center operators like AWS, Google Cloud, Alibaba) competing for dominance are investing hundreds of billions in data centers, driving down commodity prices for compute, which benefits software companies like Salesforce that can run applications across multiple providers at very low cost.

“we've all heard about these multi hundred billion doll data center Investments every week there's another another multi hundred billion dollar data center investment happening and um we have not been doing that we're we're a software company so we're all about building that software over the last 26 years to run on those data centers and we've just never seen prices this low for deployment because it is a huge level of investment and when you get this huge level of investment it drops prices and that means that for us we're able to run and deploy at a very low cost and it's a commodity product you know data center against a data center against the data center a chipset against G chipset against the chips SEC these are fundamental you know Commodities so whether we're running on Alibaba in China or Amazon or Google or maybe somebody else in the future these are just commodity centers and the prices have never been lower”

The digital labor revolution represents a 3 to 12 trillion dollar global opportunity involving AI agents and robotic agents operating in an agentic and robotic age.

“the next wave is the biggest most exciting wave of technology in the history of Technology it is the shift to digital labor it is the three 3 to 12 trillion Global shift where we are going to see digital ler take over”

Microsoft and other major tech companies have initially disappointed with their AI implementations, with co-pilot being a limited initial offering, but now the agentic vision of AI is showing real value in terms of employee augmentation and customer intimacy.

“when we look at the last few years the hype I mean honestly Microsoft has really disappointed so many companies they kind of started with you know co-pilot but they've really not found the value that they want to get to with AI but now we're really seeing that happen with the agentic uh vision of the world the idea that uh Ai and agents can really be an opportunity for an incredible level of productivity employee augmentation another level of customer intimacy with customers”