White House rules out bailout for AI as bubble fears grow

https://www.telegraph.co.uk/business/2025/11/07/white-house-rules-out-bailout-for-ai-as-bubble-fears-grow/

by zerosizedweasle • 9 months ago

43 49 9 months ago

telegraph.co.uk

techblueberry2• 9 months ago

So the AI companies are definitely getting a bail out then. Or should we call it a shmail out.

zerosizedweasle5• 9 months ago

I do think there would be revolution. People don't have another billionaire bailout in them, it would break the system

techblueberry2• 9 months ago

I agree, but I think the fortunes of the Trump administration are too tied up with the stock market for them to just let them fail. Obviously “shmail out” was a joke, but there is some truth to the idea. Because whatever it is can’t look like a bail out, it has to look like the private markets saved themselves.

V__• 9 months ago

If anything that is already happening doesn't result in one, then one bailout more also won't.

tekbruh90004• 9 months ago

The problem with the revolution talk is too few know how to "work to live".

Only 4% hunt in the US anymore. When is the last time you sewed a shirt? Grew a carrot? 100 years ago everyone had manual labor skills, even the rich. Musk and Zuckerberg live the same prisoner's dilemma.

Our lived experience informs us revolution is certain doom as we watch ourselves live daily routines that only require the smallest obligation to ourselves; eat, shower, sleep, computer.

~84% live less than 100 miles from their childhood home. Americans are fine being sedate and cared for despite the rhetoric they're rugged individuals.

Office workers need to learn how to grow potatoes and rotate a tire first.

The best kind of revolt would be a methodical Luigi style pruning. Simpsons made that joke 20+ years ago; you'd have to kill 50 CEOs to see certain changes[1]. That's included here to demonstrate how normal and old the issue is.

Inflation since 1980 is 297%. Slow steady deflation of buying power into helplessness was not an accident.

[1] https://www.reddit.com/r/simpsonsshitposting/comments/1hios5...

PeterStuer2• 9 months ago

Divide and conquer seems to have been a pretty effective diffuser of descent last time. Why do you think it won't work this time around?

jqpabc123• 9 months ago

Only if the companies buy $Trump coins.

bediger4000• 9 months ago

So it's a "bribe out".

zerosizedweasle5• 9 months ago

I wonder what is going on with Oracle's credit default swaps lol

sleepyguy• 9 months ago

If everyone’s talking about an AI bubble, chances are nothing’s going to happen—at least not yet. I think there’s still plenty of time to profit before there’s anything to worry about. There’s just so much money out there with nowhere else to go.

tyleo• 9 months ago

That does not align with my experience at all. Lots of companies are seeking investment right now but investors are being shrewd spenders. AI is a bit of an anomaly in that it still attracts investments.

zigzagger11• 9 months ago

The money at this point is probably all in the cloud providers, not the AI companies themselves.

robthebrew• 9 months ago

Has anyone analysed this house of cards? Like if OpenAI goes bust, what are the knock-ons due to the crazy loan exchange system in place across the industry.

zerosizedweasle5• 9 months ago

Yeah, I've seen a few blog posts gaming it out. It gets ugly in a hurry. There's an insane amount of risk that people have been willfully blind to

_fat_santa2• 9 months ago

The problem with bailing out these companies is that it just kicks the can down the road. When GM and Chrysler got bailed out in 08, GM returned to profitability in 2010 and Chrysler returned to profitability in 2011.

The difference here is these AI companies have never been profitable and there is no telling if a bailout will even get them to profitability, it just gives them another few years until they need another cash infusion.

Currently my prediction is that OpenAI's IPO will likely blow up in much the same way that WeWork's IPO blew up and that will likely be the start of the great AI bubble burst.

jjtheblunt2• 9 months ago

Google has long been profitable, and Gemini is legit. Perhaps they're not included in the assertion as their computational clusters are monetized in other services as well?

mapt4• 9 months ago

AI investment represents 10-20% of the value of the stock market.

Does Gemini's existence directly dictate 10-20% of your consumer spending?

(In a world of extreme wealth inequality) Now how about Paul Allen's consumer spending?

_fat_santa2• 9 months ago

In my comment I was really just referring to OpenAI, Anthropic and other companies where AI is the primary business. Google is a bit different cause they have a massive profitable business outside of AI.

zerosizedweasle5• 9 months ago

They don't want to IPO according to their CFO. I think they know that which is why they are desperate enough to float government financing.

1970-01-013• 9 months ago

Chrysler didn't really recover. It made it out alive but soon chose to be eaten by Stellantis. They now are in crisis again, but under different ownership structure so another bailing is highly unlikely. They are at best 50% American (financially) with only one vehicle in production (big minivan and medium minivan, both terrible).

GM made it, but quite a bit of their family didn't.

I would be happy to see the Microsofts being forced to choose between axing something like Xbox and Office to survive the 2030s due to AI becoming a brown turd investment. That would be wild.

1970-01-013• 9 months ago

We don't need anything "too big to fail" and should be aggressively passive whenever corporations shoot themselves in their own feet unless failure means large damage to the environment or the health of the people. The datacenter water consumption is trouble. For everyone. Everything else should be left to collapse and correct.

mapt4• 9 months ago

We passed "too big to fail" a long time ago. NVDA alone is worth $4.4T, up 1100% in five years. The entire 2008 crash only lost $8T in stock market capitalization.

foxyv• 9 months ago

I agree, one hundred percent. Capture of the government by corporate interests has neutralized the ability of the FTC to do their job and stop problems like this. Companies have gotten so large that if they catch a cold, the entire world coughs. This is unacceptable.

The question remains, "Who is going to bell the cat?"

netdevphoenix• 9 months ago

Love it when the media starts reflecting the bubble fears HN described for at least 2 years. OpenAI might not crash yet but talk of bubbles is likely to tighten AI industry companies access to investor money imo. The days of investors blindly showering money on anything AI are coming to an end looks like. Actual RoI of existing AI systems is likely to come under increasing scrutiny imo

arisAlexis• 9 months ago

actually Sam didn't ask for a bailout. Everyone is getting crazy because the big short guy who has been wrong for a decade shorting Tesla went short and then other fear mongering mainly because people just can't grasp AI (yet).

1970-01-013• 9 months ago

Once it's enshittified by ads, I'm calling AI fully baked. What is there to actually grasp other then the humongous overspending? AI hasn't had a sensational breakthrough since ChatGPT was released years ago. Everyone else is following this leader at normal technical evolution speeds.

__s• 9 months ago

https://stockcircle.com/portfolio/michael-burry/performance

Wouldn't say he's been wrong for 10 years, but agree his moves shouldn't be trusted blindly. Like all investors it's calculated risks

quickthrowman• 9 months ago

Nobody gives a shit about Michael Burry’s positions, lol. The selling is for other reasons, not Burry’s latest 13F.

He took it in the shorts while trying to short TSLA, he’s not a Market Oracle.

tim333• 9 months ago

I don't think this is about the big short guy. The main things with the recent discussion:

Sam says they are spending $1.4T on data centers although they only have $14bn/yr in income and are loss making. When asked how that works he gets defensive.

And the OpenAI CFO Sarah Friar was talking about:

"Meaning like a federal subsidy or something?" asked WSJ tech and media editor Sarah Krouse.
Friar replied, "Meaning like just first of all, the backstop, the guarantee that allows the financing to happen, that can really drop the cost of the financing...

OpenAI say people are taking that out of context and they don't want guarantees for data centers.

jakeinspace• 8 months ago

A federal guarantee of debt is a subsidy, one with horrendous potential downside. A CEO really shouldn't be so flippant, though I think he knows what he's saying.

BeFlatXIII• 9 months ago

I hope it's an uncontrolled pop.

mapt4• 9 months ago

Trump will chicken out and pay them off.

Mars008• 9 months ago

He has no money

ratelimitsteve• 9 months ago

we'll see what tomorrow brings

cibyr• 9 months ago

My "will not bailout AI companies" t-shirt has people asking a lot of questions already answered by my shirt.

White House rules out bailout for AI as bubble fears grow

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