The rise of artificial intelligence could fuel a massive productivity boom – but the technology may prove destructive if it remains unregulated, according to billionaire investor Ray Dalio.

The Bridgewater Associates founder and co-CIO said Monday that he was both excited and concerned about the rise of the groundbreaking technology, particularly generative AI programs like ChatGPT.

"This is unbelievable, it's going to be fabulous - well, fabulous and dangerous," Dalio told CNBC's "Squawk on the Street". "The technology is an unbelievable technology that will create enormous powers."

"The only issue is the power, it's the people who are at risk – how the technology is used is the risk," he added. "We're in this environment where it can either produce a tremendous amount of productivity, and raise our living standards and really make things a whole lot better – or it could be used in this war in various ways to hurt each other."

AI has been one of the defining stories for markets in 2023, with Big Tech stocks that could be central to building the theme – like Nvidia and Microsoft – racking up massive share-price gains.

But in March, a group of tech leaders including Tesla CEO Elon Musk and Apple co-founder Steve Wozniak added their signatures to an open letter warning that AI systems including OpenAI's GPT-4 posed risks to humanity and society.

The non-profit Future of Life Institute's letter said that AI was quickly becoming "human-competitive at general tasks" – and called for a six-month pause in the development of any technology more powerful than GPT-4.

Dalio echoed that warning Monday, saying that AI could cause chaos if it's not properly regulated.

"The problem that we're going to face with it is it's not going to be regulated, it's not going to be controlled and so on, so it can be used in all different ways," he told CNBC. "It'll create and contribute to a more disordered environment."

Read more: Jim Chanos, Bank of America, and others still aren't jumping on the AI hype train