Privatize the losses. These are the largest companies the world has ever seen, sitting on piles of assets like dragons. They have hyped AI endlessly to the point that everyone else is sick of it. If they haven't saved any money, and can't bail themselves out, they deserve bankruptcy.
> If they haven't saved any money, and can't bail themselves out, they deserve bankruptcy
Agree.
What we need is a revocation of the Exchange Stabilisation Fund [1] as well as hard limits on the Defense Production Act’s Title III [2] and whatever the fuck in the CHIPS Act let the President unilaterally invest taxpayer funds in Intel.
This announcement of a non-binding resolution does none of that. It’s pure puffery.
And in case anyone thinks this is hateful or harsh, remember: bankruptcy doesn’t mean we space laser these companies. Shareholders get wiped. Creditors take over. Services probably keep getting rendered, GPUs probably keep running.
If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem. If you owe the bank $100 billion, that's country's problem.
AMEN AMEN AMEN! This doesn't mean ai goes bust, this actually would force innovation even more. AI isn't going anywhere anytime soon. We have the CEO of OpenAI claiming that models running on consumer hardware is a waste of resources and encouraging that it should stay in big data centers that are extremely wasteful when it comes to resources. Most consumers couldn't afford to waste away their resources to run consumer models. I love technology. I have a deep-seated level of resentment of the difference in treatment these big corporations get vs the people.
Edit: Taking bailouts off the table forces discipline, it strips away the bloat and forces real efficiency.
Can you privatize the losses if the banks are investing, providing debt to and repackaging that debt into broader instruments?
I worry that one of the reasons that Anthropic has 500 billion in commitments and everyone is running to the credit markets is to make it so that if they fail everyone suffers.
Chapter 7, please! I would like them to *liquidate* Smaug's GPU hoard; and I would like them to do that all at once, in a swift and efficient fire sale.
They (the AI companies) are sitting on piles all right, but not "assets like dragons". Rather, what they are sitting on is piles and piles of debt that eventually will come due to be paid back. The "bet" their CEO's are making is that some "profit angle" will materialize at some point that provides the funds to pay back that debt when the bills start coming due.
> If they haven't saved any money
They have not "saved any money" (not in the sense of a "saving account" in a bank). They are leveraged as far into the future as one can see, and betting that before that lever starts to move they will have a revenue stream sufficient to pay it back.
The real issue is that the silent majority/public is often holding the bad debt, these data centers are financed through contracts which are rated much higher than what they are worth and often sold to diverse holders (e.g pension funds) Look at what happened in 2008, bad debt was repackaged and sold as good debt and we entered too big to fail situations. I think something similar could be going on here.
Indeed they may, but they will be taking a lot of people's 401k's with them. Does anyone here have a 401k and have they analyzed the portfolio to verify none of the assets are related to the AI companies? In some cases it will not be obvious.
If one owns a standard cap-weighted S&P 500 index fund or a default target-date fund in their 401k then about 30% to 40% of every dollar contributed goes directly to the dominant tech giants driving AI.
I am not a financial expert and this is not financial advice.
> If they haven't saved any money, and can't bail themselves out, they deserve bankruptcy.
But Congress wrote laws specifically to make it a horrible idea for companies to do this. At some point isn't the Congress responsible for creating an environment that not only enables but actively encourages this?
I doubt bailout was originally introduced to help the companies. I think the point is rather that not bailing out has worse outcomes and higher costs for the general population than wasting public money. Of course the companies need then still to stop doing their harmful operations, otherwise you need to bail them out again and then the costs of bailing them out will eventually become higher.
The issue is that this gives perverse incentives for companies, unless you also have proper regulation, which you should have anyway. The issue is that you don't.
But in this case I agree with you, because in addition to the costs, there are also huge benefits for the general population to letting these companies fail. Both in actual behaviour and power right now, but also as a future incentive for all other companies.
Let's keep in mind that many hedge, pension and retirement funds have investments in these big companies. In short, the potential losses are already socialized.
I was pretty vocal here about covering losses for depositors at Silicon Valley Bank because they were mostly small businesses who have more important things to do than manage the risk of their bank deposits.
I won't make a similar argument here because about an AI bailout because the counterparties know the risks, but there are pensions with requirements to hold high-grade debt buying these bonds. An AI bubble burst doesn't just show up in the Nasdaq, it hits pensions.
The Bailout already happened. A decade of ZIRP was giving these companies a blank check to pile assets while driving up inflation and ruining the bond market.
I hate this phrase. It's simultaneously self-aggrandizing and dishonest.
If you're silent, you're literally indistinguishable from any silent fringe minority. You have no assurance you even hold a majority opinion!
And besides, if you were a majority, the solution is easy: stop being silent.
I agree with you that we should privatize the losses; I'm just not going to make (and dishonestly push) the idea that what I believe is somehow a majority opinion.
Nobody who has ever run a business or knows about how a business runs would think that any business "sits on piles of assets like dragons." Very little cash sits idle, usually for anticipated operational expenditures with a reserve for unanticipated expenditures; the rest is invested, loaned, spent on building the business, or returned to investors. If OpenAI is holding $25 billion in cash, it's because they anticipate spending that much in the near future, not because they're sleeping atop it in a mountain cave.
A lot of comments read this is as fluff. And in some ways it is.
However, looking at the other side, I think what this might do is add some barrier or consideration when a bailout is considered.
The last time we did large scale bailouts (TARP[0], in 2008), It was rushed through and ratified in around two weeks following the sudden collapse of Lehman.
Any measures we can take to ensure that we don't fall into a situation where there is only one choice is sensible.
There is really no comparison. Frozen credit markets would have dragged the global economy into depression. A crash in tech stocks will just cause investors to lose some wealth. Nobody depends on AI for core operations. Not yet at least.
Also, we did a long-term fix for a 2007-style crisis already with Dodd-Frank. Government can now invoke "orderly liquidation" before a crisis happens. When commercial banks failed a few years ago, FDIC solved it in a matter of weeks with no outlay of money from Congress.
Treasury's summary is missing important pieces of the story. TARP failed its first vote in Congress, with opponents rightly pointing out that it was being rushed through and alternatives ought to be considered. But five days later, no concrete alternative had arisen, and it was clear to at least 60 reps who flipped their vote that something had to be done or the financial system was going to collapse.
Reckless behaviour should not be rewarded. If a company runs itself to the ground, its entirely on them. Otherwise government should also bailout everyone from big companies to small mom and pop stores.
> Any measures we can take to ensure that we don't fall into a situation where there is only one choice is sensible.
Amen. Prepare for a disaster tomorrow by planning for it today. The specific implementation might be mediocre, but we should be pushing for more, especially vis-a-vis pushing for anyone in the company who knowingly was involved in fraud to go to prison.
In a similar scenario though I would imagine there would likely be a similar level of urgency to act quickly that would likely steamroll or sidestep in many ways whatever barriers or considerations such a resolution might enact.
Maybe I'm just jaded but this just seems to be how the world works.
2008 was rushed, but at least the people rushing it were competent.
What would happen if the bubble burst tomorrow, with the clowns sitting at the helm of the USA?
I'm not sure your president would choose to save the American people rather than bailing our his CEO friends.
There's money to be made as backshish if Trump bails Altman and Altman gives back a %age of this to his helper..
It’s worth noting, though, that TARP succeeded in saving the US economy, which was much less affected by the crisis, and turned a profit for the US government.
Sam Altman has been pushing for the US to own a chunk of OpenAI since February 2025. Literally the earliest he could get back into the Oval Office after the inauguration.
There's an existing concept of and precedent for, "Too big to fail."
The wikipedia article gets the idea across [0].
This creates an implied "insurance" program, tilting the risk profile toward being aggressive. Taking a moon shot isn't so scary when you think the government will probably step in if it blows up bad enough.
This fluffy, political statement is a message: don't count on it.
Perhaps it will give investors/executives a few thoughts on preparing to deal with a potential blowup themselves?
It’s a resolution, so pure fluff. That said, a prohibition on bailing out this sector in particular might make it possible to claw back anything this regime illegally gives.
For some reason* the rhetoric is focused on bank bailouts in 2008, but the more direct analogy is the auto bailouts in 2008, which weren't strictly necessary but did protect an industry many Americans felt attached to. I think it's reasonable to worry that the same thing could happen to AI companies.
Then the bill will never become relevant and it’ll just be a waste of time and you can laugh at it in hindsight. And I’m sure none of these companies will lobby against it, since it’s just tilting at windmills and won’t mean anything.
I have no idea who would they even bailout. Investors? Why? What for? What would that change?
Bailing out banks made some sense so that they couldn't operate. Without the bailout there would be no more banks and a hundred million of people left on the ice.
If you want to keep AI operating you can just (temporarily?) ban investors from tearing down the AI companies they invested in for parts. You could say they are important for national security or something. I'm sure they are already earning enough to keep the lights on. Just not enout to give investors payback for insate capital expediture to set up.
Such ban wolud the governement zero, especially if you write the law well enough, so that it can't be succesfully challenged in court.
The investment to date has been ridiculous and undisciplined. It’s very hard to understand the valuations of these companies. If this wasn’t an election year I think there would be more oversight and critical review. But we have a very unserious party in charge right now.
It’s good that it’s being discussed. We’re tired of the wealth class privatizing the profits and leaving us to cover the costs.
There are almost certainly bank execs who are looking at Anthropic's IPO and thinking "if it crashes, we'll get bailed out". Saying "no you won't" now, before the IPO, when it has a chance to affect peoples' behavior, is a worthwhile thing to do.
The tech oligarchs have spent good money bribing Trump to let them do whatever they want, you better believe they’re expecting a bailout. It’s naive to think otherwise.
This makes me think about a really interesting discussion on the awesome History of Business podcast with Adrian Wooldridge[0].
Adrian Wooldridge was essentially arguing that especially with the shift towards more privately owned companies (as in, non-publicly traded) that we've seen in the US, limited-liability companies give an incentive for a large amount of risk.
Essentially there's an asymmetry, because companies going bankrupt have no liability for debts, but they gain all profits if things go well. This has always encouraged risk (and often in a good way), but publicly traded companies are ultimately owned by retirement funds etc, which is not the case for private companies. So the risk of bankruptcy is still covered by the general public, but a lot less of the benefits are felt by the public.
I think we're in fairly uncharted waters for what this risk asymmetry means for the US and global economy. It doesn't sound like something that'll end well, I expect we'll see a lot of public fall out at some stage.
Institutional investors, including retirement funds, university endowments, etc. invest in private companies, either directly or via private equity. I believe Harvard's endowment, for example, has a significant portion of its portfolio in non-public companies.
> Essentially there's an asymmetry, because companies going bankrupt have no liability for debts, but they gain all profits if things go well. This has always encouraged risk
Companies are liable for debts. I don’t know why you would conclude they’re not. If a company can’t or won’t pay their debts, they go into bankruptcy, which has significant consequences up to the company losing its assets to the creditors.
Lenders are not dumb. They collect interest in exchange for the risk of lending. This is the symmetry that you’re not seeing. The lenders can also structure their lending in ways that if the company can’t pay, the lenders get assets from the company in exchange.
LLCs apply at a lower level (not AI lab scale), and shielding individuals from downside risk is a feature, not a bug. It’s by design. There are a lot of countries where the only way to get startup funding involves signing your personal finances away in the event of failure. Financial ruin if the company doesn’t work out, aside from some minimal protections. Do you know what the small business and startup environments are like in those countries? Abysmal. Nobody can afford to take the risk, so the big establish companies are the place to work.
For the people in the comments stating that this is just fluff for voters, that may be true. But consider that this memo has another target audience: Investors, Banks, and VCs.
I know that many people in those spaces are investing in AI precisely because they believe that should their AI investments fail, the industry will be bailed out by the federal government. Getting AI to be seen favorably by the administration and putting AI within civic government systems and inside defense contracts is a pretty big push towards that outcome.
Too bad this is just pre-election grandstanding. It's a really good idea.
Usually we don't talk about a bailout until a catastrophe is underway. Then they say "We need to fix this now, because of systemic risk, and we'll worry about preventing future problems later". Declaring "we will not bail you out" before the bankruptcies tells everybody that they'd better protect themselves from moral hazard.
This is a good test case, too. The AI companies aren't nearly as intertwined with the rest of the economy as the banks are. They can fail without kicking off a domino effect. Let them.
This doesn’t actually require anything like a law, it’s basically a verbal promise. Or am I misreading?
If AI companies were to go bankrupt, it’s possible they’d be nationalized. I don’t see any other feasible option besides that or a bailout (or one but it’s effectively the other, e.g. “nationalized” but the employees including leaders are the same, or bailed out but already subservient to the military). I think the best case is for the compute to be made effectively public: giving every citizen free access, since we’re paying taxes that prevent their bankruptcy.
You are reading this exactly correct. It's the most government-coded kind of resolution: it sounds impressive, but means nothing. It is kinda nice to get that narrative out there though, we shouldn't bail out companies, we should let them fail and re-organize into companies that can work. "Bankrupt" doesn't necessarily have to mean you disappear and go away, it can mean you shuffle people and equipment around and get a new name and logo that makes more sense.
It seem very unlikely AI will get a bailout. Politicians don’t want to touch that with a 100 ft pole. This is very different than 2008 in that regard.
This is going to be a “let it burn” scenario that will be absorbed by VCs and private credit markets.
Remember too though that even if a bailout does occur investors typically get wiped out. The companies live on but the investors and employee equity typically get reset to zero.
>"Better to just oppose all bailouts for all sectors, always."
This is exactly the line of thought that turned the Wall Street crash into the Great Depression, which we learned from and did not repeat in 2008. The answer lies somewhere in the middle.
That's the logic that led to "Let's just let Lehman fail" and precipitated the 2008 crash. At scale, markets are not zero sum and failures sink all boats.
There are no good answers here. But pointing fingers and assigning blame is for sure one of the worst ways to do the analysis.
It's a very ugly thing about political polarization. It's easier to destroy than to build, and both sides seem gleeful about tearing down whatever is (rightfully or not) perceived to be aligned with the 'other'.
The reaction to Charlie Kirk's murder (not even the murder itself, but the celebration of it) made it the most shocking political event for me personally, in my lifetime. And it seems like it might be like this from now on - ripping things apart, destroying lives, and then cheering about it.
The tech industry has been getting away with doing gross things for a long time now and people are sick of it. Every year people see news of tech giants breaking the law and getting a billion dollar fine and every year they also see on the news those companies make increasingly absurd profits.
Google and facebook are the face of the destruction of privacy. On every announcement that gets posted of Google doing yet again something that increases their control over what you do, in order to serve more ads, people always comment about wanting it broken up.
Hate and distrust of the tech industry is probably the most common opinion across all demographics, other than SV residents I suppose.
No, these companies know they don't have a moat, so have been laying the groundwork for a bailout (e.g. Altman pushing the idea of "Universal Basic Compute", essentially a forced subscription to ChatGPT through your taxes).
The politicians rising through the ranks now lived through 2008 as young adults, and they watched politicians cutting checks to companies who ruined the economy, only to emerge richer; while regular folk got foreclosed on and never recovered. They heard the rise of the phrase "too big to fail".
Well now we have a group of companies that clearly want to be too big, so now is exactly the time to make clear to them they aren't too big to fail. Maybe, just maybe if they know they can't count on a UBC bailout on the other side of a bubble pop, they will act a little more responsibly (which they have not demonstrated they're capable of that to date).
How many people in this thread think that when the Dems win midterms the AI boom has a hard switch to a bust? I really feel like they will rapidly expedite the process instead of having air come out. I definitely didn't think the market would run up right to the date though.
The major buyers of inference are not government. The major funders are not government. And the industry isn’t predicated on some sort of government backstop (like perhaps banking).
What’s your proposed mechanism here? Maybe data center buildout risk, but that seems mostly local policy?
Marginally greater skepticism is probably a good thing in terms of avoiding a big shock when some big AI player, like Oracle for example, gets into serious financial trouble.
As a Danish zillennial I think the average American zillennial is far more radically anti-capitalist, anti-business than the average Danish one. Half of them may be good at hiding the sentiments behind right-wing-coded "anti-globalist" and "anti-H-1B" narratives but it's obviously left-wing coded populism.
For the rest of us, that also means the S&P 500 free lunch* will soon be over.
American zillennials are going to get their free healthcare and free higher education, and they'll do it in a way that makes France look like a well-managed, investor-friendly country.
*Unless you own real estate in Copenhagen, one of the biggest sources of wealth creation in Denmark since 2015 has been our pension funds and their exposure to US stocks.
> Special assistance like emergency lending or direct capital infusions to prop up insolvent A.I. companies’ operations or prevent their orderly resolutions through ordinary bankruptcy processes
I appreciate the signal to the lending industry to cool the brakes on this stuff, and that the they are specifically targeting golden parachutes. But legislation like this is at best largely performative.
If the economy ends up crashing because the bubble popped, and legislators can't intervene to prevent a knock-on collapse, they are going to be out of their jobs anyway.
I personally currently fully support the US stepping on the brakes on AI a bit, preferably having it collapse.
I actually really want to see the day when American technology is overtaken by China.
I wonder how exciting that would be. I'm Taiwanese, and when that time comes, I'll see if I can help China produce cheap chips.
Then my computer could run Models at the level of Claude Opus 5.5 at a very low cost.
A lot of people already hate America's technological hegemony, and it's the same in Asian and European countries.
And when it comes to AI Models, China doesn't have so much bullshit either. Anyway, everything is controlled by the state, so there's no need to even discuss this kind of argument.
Most importantly, besides China's AI Models being open source, they can bring costs down, have better efficiency, and have abundant electricity.
Break the problem of English Prompts being better than Chinese ones.
Gosh I really gotta get a real job again. The RLHF gig work has been great while I’ve been in school - flexibility, good pay - but I’ve known the whole time that it won’t last. Gig workers will be the last consideration when it all falls apart
One way to look at the current AI economics is that consumers and businesses are subsidizing training for super intelligence only available to government.
Do you think Claude and GPT refuse doing calculations for the national ignition facility? Or for STRATCOM?
Yeah it's a bet. They shouldn't be bailed out if it doesn't work out but they should enjoy the benefits if it does. Maybe a bi-partisan bill that states both sides?
Absolutely agree that socialising the losses is egregious. But there’s a reason that “too big to fail” gained so much currency during the GFC (God, doesn’t that feel like an eternity ago?). We’re in the middle of a new Cold War and the (perceived or real, doesn’t matter) strategic implications of just letting these things fall over are politically unpalatable.
Sadly, this is just posturing. When the time comes - and it will - the rest of us will have to do what we always do, and reach into our back pocket.
Any pulse on how likely this is to pass or what hurdles it faces? Neews like these give me hope but often they are written before anything materializes.
Congressional Progressive Caucus (CPC) Chair Rep. Greg Casar (TX-35) House Financial Services Committee Ranking Member Rep. Maxine Waters (CA-43) joined by Representatives Danny Davis (IL-07), Chris Deluzio (PA-17), Valerie P. Foushee (NC-04), Jesús “Chuy” García (IL-04), Pramila Jayapal (WA-07), Analilia Mejia (NJ-11), Delia Ramirez (IL-03), André Carson (IN-07), Jan Schakowsky (IL-09), Brad Sherman (CA-32), and Rashida Tlaib (MI-12).
I am extremely wary of progressive(socialists) and their agenda
On the other hand Bernie wants the government to take a 50% stake in the AI labs. Can we make up our minds, do we expect the bubble to burst or do we expect a windfall? ;-P
Either way Anthropic will IPO soon and we’ll be one step closer to finding out.
One thought I had is that, bubble or not, this technology is likely going to upend economies of entire nations and impact all people, so it would be better if controlled by the people which is (in theory) represented by the government.
Looking at this as a backdoor bailout is the wrong perspective; it should be more like giving the people control over their economic future.
Maybe I'm just jaded but I don't see Big Tech just taking this on the chin.
I imagine tens, even hundreds of millions will be spent on ensuring this resolution never passes. Or if it does pass, those millions go towards lobbying politicians to still somehow find a way to insulate Big Tech as much as possible and externalize their costs onto us.
Re-reading what I just wrote, I'm definitely jaded...
It's not being jaded, it's being realistic based on past trends and the current admin being 100% ok with padding corporate pockets instead of the working class
Fully support it. We’ve had a moral hazard in the USA for half a century with constant bailouts for speculation and gambling by businesses.
We must let them fail, no matter how many jobs it costs, no matter what the harm looks like in the short term, to send a clear and unambiguous signal to others that the government won’t backstop your shitty bets.
I wonder how we'll look back at the last 30 years at this point:
- We have a total lack of oversight, transparency on private companies and their finances
- We have VCs that very much have the capability to pump up value in a way that is detached from reality.
- The language of startups discourages saying "We are trying to..", you just say "We are". This is a launch pad for a more general culture that lacks integrity.
- The founder has become more and more of an idolized archetype. Character flaws are accepted as part of "what it takes". We accept dishonest behavior as hacks and part of the hustle.
I think this is a risk that applies to the whole VC backed tech startup economy.
Have you guys actually tried getting allocation for frontier models on something like Bedrock as a smaller company? :) What bailout? Everyone is desperate for compute. Sure, some funds probably overextended themselves financing data center buildouts for smaller players. So what? Big Tech is critically short on compute, and not by a small margin. Google Cloud grew 100%+ in a single year, and if you actually listen to Sundar, they have at least 2x the demand they can currently serve.
HN has lost its fucking mind with fear-driven hatred of the big AI labs. Never mind that virtually every metric points to the same thing: this isn't a bubble, inference is wildly popular, AI company revenue is growing faster than anything in history, on and on and on.
But to hear HN, AI is useless, all the demand is fake, the valuations are based on nothing, it's all just a few companies investing in each other, they're dangerous and reckless, they want to control everything, they want regulatory capture, it's all a marketing stunt, the open weight models are about to catch up, soon everyone will run their own models on their own hardware, on and on.
It's all bullshit. None of it makes any sense, none of it can be backed up by the data, little of it is even internally coherent, and these skeptics and haters have been consistently wrong for the last few years, with apparently zero self-reflection or awareness.
But sure, let's pass a grandstanding resolution that has no teeth to oppose a bailout that no one is asking for, for a collapse that isn't coming. Makes sense.
Not going to happen. Friendly reminder that when it came to money, politicians know exactly where the bread is buttered. When it came to Silicon Valley Bank bailout, Summers himself personally intervened[1]. Naturally, that is perfectly fine, but if one was to suggest the same for .. say.. students loan, immediately people will descend crying horrified cries of 'but but fiscal responsibility'.
This ain’t rocket science. Capitalism demands that the investors carry the losses.
If the United States thinks it is a strategic investment of critical importance in the battle for the future with China, it should either nationalize the frontier labs OR build its own.
The bigger issue is not that the direct AI companies go down in this bubble, its that they likely take Nvidia, Microsoft, Google, Intel, AMD and other big tech companies with them, hardware and software that are hugely intertwined with the global economy and many other businesses and underpin the modern computing world. Letting all them go bankrupt will have a huge impact. The problem with AI is the people exposed to it are not just AI companies, existing big tech has overinvested in it.
a) How courageous for them declaring wanting to ban something that isn't being proposed
b) if an AI bubble burst were to happen, the fallout would be severe, ie. hard to abstain for policy makers from giving the public ease of mind
c) All this proposal wants is to drive a wrench between the GOP and its new (?) populist voters, that don't want any favors given to any Big Tech oligarchs, regardless of it being AI or not.
d) this may work or not – neither party is going to abstain from bailing them out, anyways.
I seem to recall OpenAI's CFO inadvertently proposing a bailout about a year ago. I'm fairly confident that the industry has been considering the possibility of one since before that statement.
This was my thought. The last recession bailout was by democrats (in 2008), and they did so to influence the industry in their direction. I have a hard time imaging republicans would do a bailout, because they have no interest in creating new regulations even in their benefit.
Not sure why you're downvoted because you're right. If there wasn't a major election next week this would not even be happening. It's meaningless theatre to get the public cheering or jeering on their way to the polls.
In the 2008/2009 crisis the bailouts were approved by a red admin (Bush) and then the check signed, delivered hat in hand, by a blue admin (Obama). If they want a bailout they will get a bailout no matter which party is in charge.
I'm open to a special tax on A.I. companies that hedges against a bailout. Safety nets are important, and I think we should normalize a socialist outlook on economic losses so long as we can also socialize the gains.
The AI bubble is not going to burst. At my company, we could easily spend 2x more per employee on AI. Easily. And I know at several other companies that is also the case.
So, very easily these companies can get twice as much revenue over night. And that’s only the beginning. AI has very low churn.
But this is really socialism. It was not a bailout of banks, it was socialism for wealthy. Did the people lose their houses? Yes! What about the people who made obscene profits from lending money to people when they should not? Did they lose their money? No. We - the taxpayers, the ex home owners - gave them money.
What about socialism for the egg industry? When the centralized chicken stocks got a disease, we people who were paying usurious prices for food, also provided payments to ensure the wealthy owners did not suffer.
Socialism for the wealthy === good, socialism for the poor === evil. Hmmm. Oh no that can't be so lets call socialism for the rich "a bailout".
Since we force people on food stamps to work now, maybe with this "bailout" we should force those people to work minimum wage jobs?
Nah, the wealthy would have been fine either way. Bailouts are done to placate the common voter and keep their lights on. The great depression didn't see the rich and powerful starving in most cases.
The bailouts were loans, which returned slightly more than was borrowed.
Besides, business were net tax payers. It's perfectly reasonable we lend them back some of their own money so they can continue to pay taxes next year.
like anyone don't have a 401k, if AI crashes, say goodbye to 401k. This is not really constructive to the situation. What is constructive is thinking about how to improve the country's electricity system, which will benefit the people and industry alike. This country charges generally 10 to 40% of taxes yet industry have to buy their own generators for power. You know a lot of capex spending by companies which is fueling the AI bubble debate is to cover job functions that should be provided by government with existing tax dollars. And these politicians have no problem voting for 1+ trillion defense spending a year.
Good thing Elon Musk told us that AI will make saving for retirement pointless, as it seems all those retirement accounts with index funds are about to get nuked.
Has there ever been a more predicted bubble? We’re passing laws ahead of time.
I feel like real estate in 2007 was mostly in denial about a bubble. People would mention it but generally list reasons why it’s not a bubble. Same with 1999.
What does it mean when everyone agrees there’s a bubble?
I don't think many people were even aware that there was a market betting on mortgages. People could see that rates were low and people were getting mortgages that couldn't pay them but the enormous credit market betting on it and bundling them together was something only the finance people and the ultra wealthy knew about.
This one everyone can see it, its very public, it has daily enormous public marketing from all the sellers of AI in the press.
absolutely ZERO Ai companies need bailouts. this is complete theater.
if you are reading this, please do some research on how much money inference prints? its not wildly spoken about because people don’t yap about printing money.
“Oh but it’ll all come crashing down” - say you don’t work at a lab or know anyone at a lab.
My greater annoyance is HN becoming annoying political in the past few years. Sure, everything is political now but the moderation siloed these posts better. Maybe the user base is too old now. Fresh blood went to Discord or X.
Please do some research on the other costs involved in AI. Not a single AI company is making any profit and realistically are not close. Training models costs billions of dollars. There is no moat for these companies. If an open model comes out tomorrow that is better than Claude what happens to Claude's 1.5 trillion dollar valuation? What happens if revenue does not grow as fast as anticipated when Anthropic alone has 750 billion dollars in obligations? How do they pay their bills? What happens then.
The only company making money are hardware manufacturers who are throwing logs on to keep the fire burning through direct capital investments in their customers. Without Nvidia some of these neoclouds would already have failed.
I think the “it’ll come crashing down” argument comes from cheaper inference, not more expensive. The frontier labs have to pay for these massive training runs. If inference gets cheap enough that you can run it yourself, why run it on their side? Open weights are (much) less than a year behind.
Projecting that none of these AI companies will demand bailouts after the bubble crash is wildly speculative in the other direction. This has nothing to do with politics.
Trump's techbro buddies cozied up and intertwined interests with the regime's so they'd get preferential treatment when the music stopped. Just like 2008, they'll get taxpayer-funded selective socialism for wealthy people's mistakes/intentional speculation/malfeasance.
Privatize the losses. These are the largest companies the world has ever seen, sitting on piles of assets like dragons. They have hyped AI endlessly to the point that everyone else is sick of it. If they haven't saved any money, and can't bail themselves out, they deserve bankruptcy.
Signed, the Silent Majority
> If they haven't saved any money, and can't bail themselves out, they deserve bankruptcy
Agree.
What we need is a revocation of the Exchange Stabilisation Fund [1] as well as hard limits on the Defense Production Act’s Title III [2] and whatever the fuck in the CHIPS Act let the President unilaterally invest taxpayer funds in Intel.
This announcement of a non-binding resolution does none of that. It’s pure puffery.
And in case anyone thinks this is hateful or harsh, remember: bankruptcy doesn’t mean we space laser these companies. Shareholders get wiped. Creditors take over. Services probably keep getting rendered, GPUs probably keep running.
[1] https://en.wikipedia.org/wiki/Exchange_Stabilization_Fund
[2] https://www.govinfo.gov/content/pkg/COMPS-8323/pdf/COMPS-832...
Need to update the aphorism:
If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem. If you owe the bank $100 billion, that's country's problem.
AMEN AMEN AMEN! This doesn't mean ai goes bust, this actually would force innovation even more. AI isn't going anywhere anytime soon. We have the CEO of OpenAI claiming that models running on consumer hardware is a waste of resources and encouraging that it should stay in big data centers that are extremely wasteful when it comes to resources. Most consumers couldn't afford to waste away their resources to run consumer models. I love technology. I have a deep-seated level of resentment of the difference in treatment these big corporations get vs the people.
Edit: Taking bailouts off the table forces discipline, it strips away the bloat and forces real efficiency.
Can you privatize the losses if the banks are investing, providing debt to and repackaging that debt into broader instruments?
I worry that one of the reasons that Anthropic has 500 billion in commitments and everyone is running to the credit markets is to make it so that if they fail everyone suffers.
> "they deserve bankruptcy"
Chapter 7, please! I would like them to *liquidate* Smaug's GPU hoard; and I would like them to do that all at once, in a swift and efficient fire sale.
> sitting on piles of assets like dragons
Dragons are famous for sitting on gold.
Today, approximately 7%–12% of gold is used for micro-plating connectors, contact pins, and circuitry in smartphones, computers, and GPS devices.
> 1. Total AWS Gold: 10,000,000 servers multiplied by 1.875 grams equals 18,750,000 grams (18,750 kg).
> 2. Bezos's Share: 18,750 kg multiplied by an 8.5% ownership stake equals 1,593.75 kg
> sitting on piles of assets like dragons
They (the AI companies) are sitting on piles all right, but not "assets like dragons". Rather, what they are sitting on is piles and piles of debt that eventually will come due to be paid back. The "bet" their CEO's are making is that some "profit angle" will materialize at some point that provides the funds to pay back that debt when the bills start coming due.
> If they haven't saved any money
They have not "saved any money" (not in the sense of a "saving account" in a bank). They are leveraged as far into the future as one can see, and betting that before that lever starts to move they will have a revenue stream sufficient to pay it back.
I might agree with what you have to say, but I do not think anyone should be declaring their own opinion to be that of the majority.
I have seen this used abusively too many times.
The moral majority is neither.
If your opinion is the majority opinion you do not need to say so.
The real issue is that the silent majority/public is often holding the bad debt, these data centers are financed through contracts which are rated much higher than what they are worth and often sold to diverse holders (e.g pension funds) Look at what happened in 2008, bad debt was repackaged and sold as good debt and we entered too big to fail situations. I think something similar could be going on here.
The "silent majority" doesn't exist if it doesn't vote. Democracy isn't Halloween, ghosts don't exist.
they deserve bankruptcy.
Indeed they may, but they will be taking a lot of people's 401k's with them. Does anyone here have a 401k and have they analyzed the portfolio to verify none of the assets are related to the AI companies? In some cases it will not be obvious.
If one owns a standard cap-weighted S&P 500 index fund or a default target-date fund in their 401k then about 30% to 40% of every dollar contributed goes directly to the dominant tech giants driving AI.
I am not a financial expert and this is not financial advice.
> If they haven't saved any money, and can't bail themselves out, they deserve bankruptcy.
But Congress wrote laws specifically to make it a horrible idea for companies to do this. At some point isn't the Congress responsible for creating an environment that not only enables but actively encourages this?
This. Glad we are saying this upfront. You made this mess, talk to your shareholders about the bailout.
They should use that super intelligence to get themselves outa debt - ya know pull a Thanos.
> sitting on piles of assets like dragons.
Surely this isn’t pure coincidence!?
Jeff, the Origin https://imgur.com/gallery/jeff-origin-lp9Q2tC
I doubt bailout was originally introduced to help the companies. I think the point is rather that not bailing out has worse outcomes and higher costs for the general population than wasting public money. Of course the companies need then still to stop doing their harmful operations, otherwise you need to bail them out again and then the costs of bailing them out will eventually become higher.
The issue is that this gives perverse incentives for companies, unless you also have proper regulation, which you should have anyway. The issue is that you don't.
But in this case I agree with you, because in addition to the costs, there are also huge benefits for the general population to letting these companies fail. Both in actual behaviour and power right now, but also as a future incentive for all other companies.
Silent majority owns majority of shares in these companies, via 401Ks,etc
Let's keep in mind that many hedge, pension and retirement funds have investments in these big companies. In short, the potential losses are already socialized.
The crazy thing is that government funded a lot of this hyper growth for these AI companies. Very similar to Boeing / McDonnel Douglas.
The people who want to nationalize the losses are the ones who pay the politicians. My market strategy is to assume a bailout.
The silent majority doesn’t live on Hacker News
We can and should be the very very loud majority.
thanks but you don't speak for anyone except yourself. Signed, the Silent Majority
I was pretty vocal here about covering losses for depositors at Silicon Valley Bank because they were mostly small businesses who have more important things to do than manage the risk of their bank deposits.
I won't make a similar argument here because about an AI bailout because the counterparties know the risks, but there are pensions with requirements to hold high-grade debt buying these bonds. An AI bubble burst doesn't just show up in the Nasdaq, it hits pensions.
Sure, but they have a lot of money to buy me votes and new cars and stuff.
- your elected representatives
The Bailout already happened. A decade of ZIRP was giving these companies a blank check to pile assets while driving up inflation and ruining the bond market.
we all know it's lip service anyway
But then USA loses to China, Communism will take over, moisturizer shortages etc. Signed, the noisy majority
Sorry to pop your "bubble bubble" but Anthropic already showed they are running a profit, in their recent IPO filing.
China? Is that you?
> Signed, the Silent Majority
I hate this phrase. It's simultaneously self-aggrandizing and dishonest.
If you're silent, you're literally indistinguishable from any silent fringe minority. You have no assurance you even hold a majority opinion!
And besides, if you were a majority, the solution is easy: stop being silent.
I agree with you that we should privatize the losses; I'm just not going to make (and dishonestly push) the idea that what I believe is somehow a majority opinion.
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> Privatize the losses
Isn't that what the IPOs are for?
Nobody who has ever run a business or knows about how a business runs would think that any business "sits on piles of assets like dragons." Very little cash sits idle, usually for anticipated operational expenditures with a reserve for unanticipated expenditures; the rest is invested, loaned, spent on building the business, or returned to investors. If OpenAI is holding $25 billion in cash, it's because they anticipate spending that much in the near future, not because they're sleeping atop it in a mountain cave.
A lot of comments read this is as fluff. And in some ways it is.
However, looking at the other side, I think what this might do is add some barrier or consideration when a bailout is considered.
The last time we did large scale bailouts (TARP[0], in 2008), It was rushed through and ratified in around two weeks following the sudden collapse of Lehman.
Any measures we can take to ensure that we don't fall into a situation where there is only one choice is sensible.
[0] https://home.treasury.gov/data/troubled-assets-relief-progra...
There is really no comparison. Frozen credit markets would have dragged the global economy into depression. A crash in tech stocks will just cause investors to lose some wealth. Nobody depends on AI for core operations. Not yet at least.
Also, we did a long-term fix for a 2007-style crisis already with Dodd-Frank. Government can now invoke "orderly liquidation" before a crisis happens. When commercial banks failed a few years ago, FDIC solved it in a matter of weeks with no outlay of money from Congress.
> what this might do is add some barrier or consideration when a bailout is considered
It’s a resolution. Pure puffery. A serious effort would have involved floating a bill.
Treasury's summary is missing important pieces of the story. TARP failed its first vote in Congress, with opponents rightly pointing out that it was being rushed through and alternatives ought to be considered. But five days later, no concrete alternative had arisen, and it was clear to at least 60 reps who flipped their vote that something had to be done or the financial system was going to collapse.
Reckless behaviour should not be rewarded. If a company runs itself to the ground, its entirely on them. Otherwise government should also bailout everyone from big companies to small mom and pop stores.
> Any measures we can take to ensure that we don't fall into a situation where there is only one choice is sensible.
Amen. Prepare for a disaster tomorrow by planning for it today. The specific implementation might be mediocre, but we should be pushing for more, especially vis-a-vis pushing for anyone in the company who knowingly was involved in fraud to go to prison.
In a similar scenario though I would imagine there would likely be a similar level of urgency to act quickly that would likely steamroll or sidestep in many ways whatever barriers or considerations such a resolution might enact.
Maybe I'm just jaded but this just seems to be how the world works.
2008 was rushed, but at least the people rushing it were competent.
What would happen if the bubble burst tomorrow, with the clowns sitting at the helm of the USA?
I'm not sure your president would choose to save the American people rather than bailing our his CEO friends. There's money to be made as backshish if Trump bails Altman and Altman gives back a %age of this to his helper..
It’s worth noting, though, that TARP succeeded in saving the US economy, which was much less affected by the crisis, and turned a profit for the US government.
Is there any indication that such a bailout was even planned or is this just populist tilting at windmills?
It is preemptive. Everyone can see the bubble and these companies are barrelling forwarding anyway. It is reckless and irresponsible.
Sam Altman has been pushing for the US to own a chunk of OpenAI since February 2025. Literally the earliest he could get back into the Oval Office after the inauguration.
A bailout is part of their planning.
It's not just populist tilting at windmills.
There's an existing concept of and precedent for, "Too big to fail." The wikipedia article gets the idea across [0].
This creates an implied "insurance" program, tilting the risk profile toward being aggressive. Taking a moon shot isn't so scary when you think the government will probably step in if it blows up bad enough.
This fluffy, political statement is a message: don't count on it.
Perhaps it will give investors/executives a few thoughts on preparing to deal with a potential blowup themselves?
[0] https://en.wikipedia.org/wiki/Too_big_to_fail
It’s a resolution, so pure fluff. That said, a prohibition on bailing out this sector in particular might make it possible to claw back anything this regime illegally gives.
For some reason* the rhetoric is focused on bank bailouts in 2008, but the more direct analogy is the auto bailouts in 2008, which weren't strictly necessary but did protect an industry many Americans felt attached to. I think it's reasonable to worry that the same thing could happen to AI companies.
* yes, I know what the reason is
It's just convention at this point in the 21st century. No indication of a plan is needed when it's the only outcome to be expected.
Then the bill will never become relevant and it’ll just be a waste of time and you can laugh at it in hindsight. And I’m sure none of these companies will lobby against it, since it’s just tilting at windmills and won’t mean anything.
Yes, it has been discussed a year ago in the Govt circles that AI will be bailed out.
https://youtu.be/FvBf9HBT_F8?t=1672
I have no idea who would they even bailout. Investors? Why? What for? What would that change?
Bailing out banks made some sense so that they couldn't operate. Without the bailout there would be no more banks and a hundred million of people left on the ice.
If you want to keep AI operating you can just (temporarily?) ban investors from tearing down the AI companies they invested in for parts. You could say they are important for national security or something. I'm sure they are already earning enough to keep the lights on. Just not enout to give investors payback for insate capital expediture to set up.
Such ban wolud the governement zero, especially if you write the law well enough, so that it can't be succesfully challenged in court.
The investment to date has been ridiculous and undisciplined. It’s very hard to understand the valuations of these companies. If this wasn’t an election year I think there would be more oversight and critical review. But we have a very unserious party in charge right now.
It’s good that it’s being discussed. We’re tired of the wealth class privatizing the profits and leaving us to cover the costs.
There are almost certainly bank execs who are looking at Anthropic's IPO and thinking "if it crashes, we'll get bailed out". Saying "no you won't" now, before the IPO, when it has a chance to affect peoples' behavior, is a worthwhile thing to do.
The latter.
Nope. The balance sheet of big tech companies are healthy enough not to need to bailout anyways. AI startups can of course fail.
The tech oligarchs have spent good money bribing Trump to let them do whatever they want, you better believe they’re expecting a bailout. It’s naive to think otherwise.
David Sacks has been a bit sidelined by the regime, but he was the one lobbying for the bailout of Silicon Valley Bank (under the Democrats!).
So there will be a huge pressure. Trump Jr. and the Kushners are invested in all sorts of bubbly assets, too.
The Democrats should do this however, and if they win the midterms keep their promises for once and block everything. Then 2028 is easy.
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This makes me think about a really interesting discussion on the awesome History of Business podcast with Adrian Wooldridge[0].
Adrian Wooldridge was essentially arguing that especially with the shift towards more privately owned companies (as in, non-publicly traded) that we've seen in the US, limited-liability companies give an incentive for a large amount of risk.
Essentially there's an asymmetry, because companies going bankrupt have no liability for debts, but they gain all profits if things go well. This has always encouraged risk (and often in a good way), but publicly traded companies are ultimately owned by retirement funds etc, which is not the case for private companies. So the risk of bankruptcy is still covered by the general public, but a lot less of the benefits are felt by the public.
I think we're in fairly uncharted waters for what this risk asymmetry means for the US and global economy. It doesn't sound like something that'll end well, I expect we'll see a lot of public fall out at some stage.
>Essentially there's an asymmetry, because companies going bankrupt have no liability for debts
That's not what a limited-liability company is, not what it means. Anthropic and OpenAI are not LLCs.
>So the risk of bankruptcy is still covered by the general public, but a lot less of the benefits are felt by the public.
That's not how any of this works. Reading comments like this on HN and from elected officials is disappointing.
Institutional investors, including retirement funds, university endowments, etc. invest in private companies, either directly or via private equity. I believe Harvard's endowment, for example, has a significant portion of its portfolio in non-public companies.
> Essentially there's an asymmetry, because companies going bankrupt have no liability for debts, but they gain all profits if things go well. This has always encouraged risk
Companies are liable for debts. I don’t know why you would conclude they’re not. If a company can’t or won’t pay their debts, they go into bankruptcy, which has significant consequences up to the company losing its assets to the creditors.
Lenders are not dumb. They collect interest in exchange for the risk of lending. This is the symmetry that you’re not seeing. The lenders can also structure their lending in ways that if the company can’t pay, the lenders get assets from the company in exchange.
LLCs apply at a lower level (not AI lab scale), and shielding individuals from downside risk is a feature, not a bug. It’s by design. There are a lot of countries where the only way to get startup funding involves signing your personal finances away in the event of failure. Financial ruin if the company doesn’t work out, aside from some minimal protections. Do you know what the small business and startup environments are like in those countries? Abysmal. Nobody can afford to take the risk, so the big establish companies are the place to work.
Do you have the link handy?
For the people in the comments stating that this is just fluff for voters, that may be true. But consider that this memo has another target audience: Investors, Banks, and VCs.
I know that many people in those spaces are investing in AI precisely because they believe that should their AI investments fail, the industry will be bailed out by the federal government. Getting AI to be seen favorably by the administration and putting AI within civic government systems and inside defense contracts is a pretty big push towards that outcome.
Too bad this is just pre-election grandstanding. It's a really good idea.
Usually we don't talk about a bailout until a catastrophe is underway. Then they say "We need to fix this now, because of systemic risk, and we'll worry about preventing future problems later". Declaring "we will not bail you out" before the bankruptcies tells everybody that they'd better protect themselves from moral hazard.
This is a good test case, too. The AI companies aren't nearly as intertwined with the rest of the economy as the banks are. They can fail without kicking off a domino effect. Let them.
This doesn’t actually require anything like a law, it’s basically a verbal promise. Or am I misreading?
If AI companies were to go bankrupt, it’s possible they’d be nationalized. I don’t see any other feasible option besides that or a bailout (or one but it’s effectively the other, e.g. “nationalized” but the employees including leaders are the same, or bailed out but already subservient to the military). I think the best case is for the compute to be made effectively public: giving every citizen free access, since we’re paying taxes that prevent their bankruptcy.
You are reading this exactly correct. It's the most government-coded kind of resolution: it sounds impressive, but means nothing. It is kinda nice to get that narrative out there though, we shouldn't bail out companies, we should let them fail and re-organize into companies that can work. "Bankrupt" doesn't necessarily have to mean you disappear and go away, it can mean you shuffle people and equipment around and get a new name and logo that makes more sense.
Intuitively you would think that a law is not required to prevent this but you’d be wrong.
Check out this excellent article for more background: https://www.theatlantic.com/ideas/2026/10/bubble-bailout-tru...
It seem very unlikely AI will get a bailout. Politicians don’t want to touch that with a 100 ft pole. This is very different than 2008 in that regard.
This is going to be a “let it burn” scenario that will be absorbed by VCs and private credit markets.
Remember too though that even if a bailout does occur investors typically get wiped out. The companies live on but the investors and employee equity typically get reset to zero.
Better to just oppose all bailouts for all sectors, always.
Most of world did worse in 2008. The bailout worked in the US
>"Better to just oppose all bailouts for all sectors, always."
This is exactly the line of thought that turned the Wall Street crash into the Great Depression, which we learned from and did not repeat in 2008. The answer lies somewhere in the middle.
That's the logic that led to "Let's just let Lehman fail" and precipitated the 2008 crash. At scale, markets are not zero sum and failures sink all boats.
There are no good answers here. But pointing fingers and assigning blame is for sure one of the worst ways to do the analysis.
Yet more meaningless political theatre.
This generates ZERO passed bills, but lots of pre-election rage bait donations.
End-stage Alexis de Tocqueville material.
There should never be any kind of bailout that does not lead to public ownership, like any investment, regardless of whether it should have happened.
Everything else is theft and money laundering and criminality.
> There should never be any kind of bailout that does not lead to public ownership, like any investment
Why no credit based bailouts?
No bailout is fine but I think the gross thing about this is it's clear they also hope these companies fail.
It's a very ugly thing about political polarization. It's easier to destroy than to build, and both sides seem gleeful about tearing down whatever is (rightfully or not) perceived to be aligned with the 'other'.
The reaction to Charlie Kirk's murder (not even the murder itself, but the celebration of it) made it the most shocking political event for me personally, in my lifetime. And it seems like it might be like this from now on - ripping things apart, destroying lives, and then cheering about it.
The tech industry has been getting away with doing gross things for a long time now and people are sick of it. Every year people see news of tech giants breaking the law and getting a billion dollar fine and every year they also see on the news those companies make increasingly absurd profits.
Google and facebook are the face of the destruction of privacy. On every announcement that gets posted of Google doing yet again something that increases their control over what you do, in order to serve more ads, people always comment about wanting it broken up.
Hate and distrust of the tech industry is probably the most common opinion across all demographics, other than SV residents I suppose.
No, these companies know they don't have a moat, so have been laying the groundwork for a bailout (e.g. Altman pushing the idea of "Universal Basic Compute", essentially a forced subscription to ChatGPT through your taxes).
The politicians rising through the ranks now lived through 2008 as young adults, and they watched politicians cutting checks to companies who ruined the economy, only to emerge richer; while regular folk got foreclosed on and never recovered. They heard the rise of the phrase "too big to fail".
Well now we have a group of companies that clearly want to be too big, so now is exactly the time to make clear to them they aren't too big to fail. Maybe, just maybe if they know they can't count on a UBC bailout on the other side of a bubble pop, they will act a little more responsibly (which they have not demonstrated they're capable of that to date).
How many people in this thread think that when the Dems win midterms the AI boom has a hard switch to a bust? I really feel like they will rapidly expedite the process instead of having air come out. I definitely didn't think the market would run up right to the date though.
The major buyers of inference are not government. The major funders are not government. And the industry isn’t predicated on some sort of government backstop (like perhaps banking).
What’s your proposed mechanism here? Maybe data center buildout risk, but that seems mostly local policy?
Marginally greater skepticism is probably a good thing in terms of avoiding a big shock when some big AI player, like Oracle for example, gets into serious financial trouble.
As a Danish zillennial I think the average American zillennial is far more radically anti-capitalist, anti-business than the average Danish one. Half of them may be good at hiding the sentiments behind right-wing-coded "anti-globalist" and "anti-H-1B" narratives but it's obviously left-wing coded populism.
For the rest of us, that also means the S&P 500 free lunch* will soon be over.
American zillennials are going to get their free healthcare and free higher education, and they'll do it in a way that makes France look like a well-managed, investor-friendly country.
*Unless you own real estate in Copenhagen, one of the biggest sources of wealth creation in Denmark since 2015 has been our pension funds and their exposure to US stocks.
> Special assistance like emergency lending or direct capital infusions to prop up insolvent A.I. companies’ operations or prevent their orderly resolutions through ordinary bankruptcy processes
I appreciate the signal to the lending industry to cool the brakes on this stuff, and that the they are specifically targeting golden parachutes. But legislation like this is at best largely performative.
If the economy ends up crashing because the bubble popped, and legislators can't intervene to prevent a knock-on collapse, they are going to be out of their jobs anyway.
I personally currently fully support the US stepping on the brakes on AI a bit, preferably having it collapse.
I actually really want to see the day when American technology is overtaken by China.
I wonder how exciting that would be. I'm Taiwanese, and when that time comes, I'll see if I can help China produce cheap chips.
Then my computer could run Models at the level of Claude Opus 5.5 at a very low cost.
A lot of people already hate America's technological hegemony, and it's the same in Asian and European countries.
And when it comes to AI Models, China doesn't have so much bullshit either. Anyway, everything is controlled by the state, so there's no need to even discuss this kind of argument.
Most importantly, besides China's AI Models being open source, they can bring costs down, have better efficiency, and have abundant electricity.
Break the problem of English Prompts being better than Chinese ones.
All hail China!
https://web.archive.org/web/20261030122836if_/https://progre...
Not sure why there's a Google Drive URL for the resolution
Alternative to Google Drive:
https://progressives.house.gov/_cache/files/f/c/fc0cb325-7d5...
https://web.archive.org/web/20261030122958if_/https://progre...
The US media using the abbreviation Reps to mean representatives and Republicans at the same time is very confusing.
Isn't the purpose of a bailout to stop a larger economic collapse rather than save a company?
My contention is it doesn't stop a larger economic collapse - it just kicks it down the road and makes it grow even larger.
Gosh I really gotta get a real job again. The RLHF gig work has been great while I’ve been in school - flexibility, good pay - but I’ve known the whole time that it won’t last. Gig workers will be the last consideration when it all falls apart
Is anyone noticing that from past few days, a certain level of "priming" has started with such articles appearing more and more?
It's almost like the news is being reported. Very suspicious.
One way to look at the current AI economics is that consumers and businesses are subsidizing training for super intelligence only available to government.
Do you think Claude and GPT refuse doing calculations for the national ignition facility? Or for STRATCOM?
Why does this even need legislation? Isn't this the default for all companies?
Yeah it's a bet. They shouldn't be bailed out if it doesn't work out but they should enjoy the benefits if it does. Maybe a bi-partisan bill that states both sides?
Guess the big AI companies are not paying enough donation to them.
Absolutely agree that socialising the losses is egregious. But there’s a reason that “too big to fail” gained so much currency during the GFC (God, doesn’t that feel like an eternity ago?). We’re in the middle of a new Cold War and the (perceived or real, doesn’t matter) strategic implications of just letting these things fall over are politically unpalatable.
Sadly, this is just posturing. When the time comes - and it will - the rest of us will have to do what we always do, and reach into our back pocket.
Ain’t no teat like the gub’mint teat.
Any pulse on how likely this is to pass or what hurdles it faces? Neews like these give me hope but often they are written before anything materializes.
AI companies maybe shouldn't be riding the coat tails of other people's money, intellegence, nor IP.
Congressional Progressive Caucus (CPC) Chair Rep. Greg Casar (TX-35) House Financial Services Committee Ranking Member Rep. Maxine Waters (CA-43) joined by Representatives Danny Davis (IL-07), Chris Deluzio (PA-17), Valerie P. Foushee (NC-04), Jesús “Chuy” García (IL-04), Pramila Jayapal (WA-07), Analilia Mejia (NJ-11), Delia Ramirez (IL-03), André Carson (IN-07), Jan Schakowsky (IL-09), Brad Sherman (CA-32), and Rashida Tlaib (MI-12).
I am extremely wary of progressive(socialists) and their agenda
On the other hand Bernie wants the government to take a 50% stake in the AI labs. Can we make up our minds, do we expect the bubble to burst or do we expect a windfall? ;-P
Either way Anthropic will IPO soon and we’ll be one step closer to finding out.
One thought I had is that, bubble or not, this technology is likely going to upend economies of entire nations and impact all people, so it would be better if controlled by the people which is (in theory) represented by the government.
Looking at this as a backdoor bailout is the wrong perspective; it should be more like giving the people control over their economic future.
Maybe I'm just jaded but I don't see Big Tech just taking this on the chin.
I imagine tens, even hundreds of millions will be spent on ensuring this resolution never passes. Or if it does pass, those millions go towards lobbying politicians to still somehow find a way to insulate Big Tech as much as possible and externalize their costs onto us.
Re-reading what I just wrote, I'm definitely jaded...
It's not being jaded, it's being realistic based on past trends and the current admin being 100% ok with padding corporate pockets instead of the working class
Fully support it. We’ve had a moral hazard in the USA for half a century with constant bailouts for speculation and gambling by businesses.
We must let them fail, no matter how many jobs it costs, no matter what the harm looks like in the short term, to send a clear and unambiguous signal to others that the government won’t backstop your shitty bets.
I wonder how we'll look back at the last 30 years at this point:
- We have a total lack of oversight, transparency on private companies and their finances
- We have VCs that very much have the capability to pump up value in a way that is detached from reality.
- The language of startups discourages saying "We are trying to..", you just say "We are". This is a launch pad for a more general culture that lacks integrity.
- The founder has become more and more of an idolized archetype. Character flaws are accepted as part of "what it takes". We accept dishonest behavior as hacks and part of the hustle.
I think this is a risk that applies to the whole VC backed tech startup economy.
Have you guys actually tried getting allocation for frontier models on something like Bedrock as a smaller company? :) What bailout? Everyone is desperate for compute. Sure, some funds probably overextended themselves financing data center buildouts for smaller players. So what? Big Tech is critically short on compute, and not by a small margin. Google Cloud grew 100%+ in a single year, and if you actually listen to Sundar, they have at least 2x the demand they can currently serve.
HN has lost its fucking mind with fear-driven hatred of the big AI labs. Never mind that virtually every metric points to the same thing: this isn't a bubble, inference is wildly popular, AI company revenue is growing faster than anything in history, on and on and on.
But to hear HN, AI is useless, all the demand is fake, the valuations are based on nothing, it's all just a few companies investing in each other, they're dangerous and reckless, they want to control everything, they want regulatory capture, it's all a marketing stunt, the open weight models are about to catch up, soon everyone will run their own models on their own hardware, on and on.
It's all bullshit. None of it makes any sense, none of it can be backed up by the data, little of it is even internally coherent, and these skeptics and haters have been consistently wrong for the last few years, with apparently zero self-reflection or awareness.
But sure, let's pass a grandstanding resolution that has no teeth to oppose a bailout that no one is asking for, for a collapse that isn't coming. Makes sense.
Excuse my ignorance, but aren't we screwed either way?
isnt Anthropic already too-big-to-fail?
I seem to get by fine on the daily without using any LLMs. They’re just-the-right-size-to-fail.
Not going to happen. Friendly reminder that when it came to money, politicians know exactly where the bread is buttered. When it came to Silicon Valley Bank bailout, Summers himself personally intervened[1]. Naturally, that is perfectly fine, but if one was to suggest the same for .. say.. students loan, immediately people will descend crying horrified cries of 'but but fiscal responsibility'.
[1]https://en.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Ban...
This ain’t rocket science. Capitalism demands that the investors carry the losses.
If the United States thinks it is a strategic investment of critical importance in the battle for the future with China, it should either nationalize the frontier labs OR build its own.
The bigger issue is not that the direct AI companies go down in this bubble, its that they likely take Nvidia, Microsoft, Google, Intel, AMD and other big tech companies with them, hardware and software that are hugely intertwined with the global economy and many other businesses and underpin the modern computing world. Letting all them go bankrupt will have a huge impact. The problem with AI is the people exposed to it are not just AI companies, existing big tech has overinvested in it.
a) How courageous for them declaring wanting to ban something that isn't being proposed
b) if an AI bubble burst were to happen, the fallout would be severe, ie. hard to abstain for policy makers from giving the public ease of mind
c) All this proposal wants is to drive a wrench between the GOP and its new (?) populist voters, that don't want any favors given to any Big Tech oligarchs, regardless of it being AI or not.
d) this may work or not – neither party is going to abstain from bailing them out, anyways.
I seem to recall OpenAI's CFO inadvertently proposing a bailout about a year ago. I'm fairly confident that the industry has been considering the possibility of one since before that statement.
This was my thought. The last recession bailout was by democrats (in 2008), and they did so to influence the industry in their direction. I have a hard time imaging republicans would do a bailout, because they have no interest in creating new regulations even in their benefit.
Not sure why you're downvoted because you're right. If there wasn't a major election next week this would not even be happening. It's meaningless theatre to get the public cheering or jeering on their way to the polls.
In the 2008/2009 crisis the bailouts were approved by a red admin (Bush) and then the check signed, delivered hat in hand, by a blue admin (Obama). If they want a bailout they will get a bailout no matter which party is in charge.
? What? Is someone already talking a bailout before the bubble has even burst?
If they know it will burst, then maybe prevent the bubble in the first place.
I'm open to a special tax on A.I. companies that hedges against a bailout. Safety nets are important, and I think we should normalize a socialist outlook on economic losses so long as we can also socialize the gains.
The AI bubble is not going to burst. At my company, we could easily spend 2x more per employee on AI. Easily. And I know at several other companies that is also the case.
So, very easily these companies can get twice as much revenue over night. And that’s only the beginning. AI has very low churn.
The terminology is the issue - "A bailout".
But this is really socialism. It was not a bailout of banks, it was socialism for wealthy. Did the people lose their houses? Yes! What about the people who made obscene profits from lending money to people when they should not? Did they lose their money? No. We - the taxpayers, the ex home owners - gave them money.
What about socialism for the egg industry? When the centralized chicken stocks got a disease, we people who were paying usurious prices for food, also provided payments to ensure the wealthy owners did not suffer.
Socialism for the wealthy === good, socialism for the poor === evil. Hmmm. Oh no that can't be so lets call socialism for the rich "a bailout".
Since we force people on food stamps to work now, maybe with this "bailout" we should force those people to work minimum wage jobs?
Nah, the wealthy would have been fine either way. Bailouts are done to placate the common voter and keep their lights on. The great depression didn't see the rich and powerful starving in most cases. The bailouts were loans, which returned slightly more than was borrowed.
Besides, business were net tax payers. It's perfectly reasonable we lend them back some of their own money so they can continue to pay taxes next year.
You end on petty vitriol, tsk tsk.
Soo does this mean RAM is gonna get cheaper or more expensive?
like anyone don't have a 401k, if AI crashes, say goodbye to 401k. This is not really constructive to the situation. What is constructive is thinking about how to improve the country's electricity system, which will benefit the people and industry alike. This country charges generally 10 to 40% of taxes yet industry have to buy their own generators for power. You know a lot of capex spending by companies which is fueling the AI bubble debate is to cover job functions that should be provided by government with existing tax dollars. And these politicians have no problem voting for 1+ trillion defense spending a year.
Let them fail.
Good thing Elon Musk told us that AI will make saving for retirement pointless, as it seems all those retirement accounts with index funds are about to get nuked.
> the billionaire AI boys who created the problem
Niki Parmar: am I a joke to you?
Everyone is so convinced that AI is bubble, it is hilarious. This market doesn't look extended to me given the fundamentals.
Nonsense. The losses will be swallowed by the government, i.e. the tax payers, in the name of “National Interest”.
So, they've discovered capitalism?
Has there ever been a more predicted bubble? We’re passing laws ahead of time.
I feel like real estate in 2007 was mostly in denial about a bubble. People would mention it but generally list reasons why it’s not a bubble. Same with 1999.
What does it mean when everyone agrees there’s a bubble?
I don't think many people were even aware that there was a market betting on mortgages. People could see that rates were low and people were getting mortgages that couldn't pay them but the enormous credit market betting on it and bundling them together was something only the finance people and the ultra wealthy knew about.
This one everyone can see it, its very public, it has daily enormous public marketing from all the sellers of AI in the press.
For a second I was hoping that the bubble was already bursting.
How do you think your personal finances will fare if it's a bubble and it pops?
I work on AI and I oppose a bailout for an ai bubble or whatever else.
If you're lucky enough to be in this field and you're not managing your finances, that's not the governments problem to fix
Exactly. There's never an excuse for a bailout, for any industry.
absolutely ZERO Ai companies need bailouts. this is complete theater.
if you are reading this, please do some research on how much money inference prints? its not wildly spoken about because people don’t yap about printing money.
“Oh but it’ll all come crashing down” - say you don’t work at a lab or know anyone at a lab.
My greater annoyance is HN becoming annoying political in the past few years. Sure, everything is political now but the moderation siloed these posts better. Maybe the user base is too old now. Fresh blood went to Discord or X.
Please do some research on the other costs involved in AI. Not a single AI company is making any profit and realistically are not close. Training models costs billions of dollars. There is no moat for these companies. If an open model comes out tomorrow that is better than Claude what happens to Claude's 1.5 trillion dollar valuation? What happens if revenue does not grow as fast as anticipated when Anthropic alone has 750 billion dollars in obligations? How do they pay their bills? What happens then.
The only company making money are hardware manufacturers who are throwing logs on to keep the fire burning through direct capital investments in their customers. Without Nvidia some of these neoclouds would already have failed.
I think the “it’ll come crashing down” argument comes from cheaper inference, not more expensive. The frontier labs have to pay for these massive training runs. If inference gets cheap enough that you can run it yourself, why run it on their side? Open weights are (much) less than a year behind.
Projecting that none of these AI companies will demand bailouts after the bubble crash is wildly speculative in the other direction. This has nothing to do with politics.
Trump's techbro buddies cozied up and intertwined interests with the regime's so they'd get preferential treatment when the music stopped. Just like 2008, they'll get taxpayer-funded selective socialism for wealthy people's mistakes/intentional speculation/malfeasance.
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This is the dems version of “No more endless wars”