Nov 3 (Reuters) - Investors are overlooking mounting

risks to the current market stability and the limits of the

artificial intelligence boom, particularly in the United States,

Bridgewater Associates' co-chief investment officers said in a

note to clients on Monday.

While major technology firms have poured billions into AI

and its supporting infrastructure, it is still unclear whether

those investments will generate the cash flows needed to sustain

lofty expectations, they said.

The comments underscore growing unease over a potential

market bubble, as the benchmark S&P 500 continues its

meteoric rise, repeatedly setting record highs and reviving

memories of the dot-com era.

"U.S. equities are priced as though the favorable conditions

that lifted all companies, not just tech, will persist," the

investment firm's co-CIOs Bob Prince, Greg Jensen and Karen

Karniol-Tambour said.

"The growth expectations discounted today are about as

optimistic as they've been in nearly 100 years, with the brief

exception of the dot-com bubble," they said.

Markets, however, have largely shrugged off worries about

inflation, high interest rates, policy uncertainty from shifting

trade dynamics and the second-longest federal government

shutdown.

The S&P 500 has climbed roughly 16% year-to-date, and

is now entering a seasonally strong stretch for equities.

"Despite the many potential sources of volatility in the

world today, market measures of risk remain unfazed,"

Bridgewater co-CIOs said, adding that the current environment

carries "an uncomfortably high probability of unknowable and

extreme outcomes".

Bridgewater, founded by billionaire investor Ray Dalio, is

widely considered to be one of the world's most successful hedge

funds.

"AI infrastructure, including chips, buildings, routers and

other networking gear, will become obsolete as the technology

advances rapidly," said David Spreng, CEO at venture debt firm

Runway Growth Capital.

"I just don't think that AI infrastructure is a good bet

from a venture debt perspective right now. The risks are not

symmetrical."