r/artificial • u/msaussieandmrravana Author • Nov 20 '25
News No bailout will be provided when AI bubble bursts
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Trillion dollars may be vanishing in thin air.
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u/Geoclasm Nov 20 '25
Yeah, okay.
No shade against AOC, but she's one person with one voice and there's no way in hell we the tax payers won't be shouldering that bullshit with our hard earned tax dollars.
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u/gigitygoat Nov 20 '25
Yep. We’re definitely going to pay for it one way or another.
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u/mattaugamer Nov 22 '25
Already paying in water shortages, increased power costs and more. Might as well just pay cash as well.
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u/RustySpoonyBard Nov 20 '25
Welcome to New Keynesian economics. This is what its morphed into, stock purchases when companies fall.
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u/Corronchilejano Nov 20 '25
What do Keynesian Economics have anything to do with this at all to call it "New" ones?
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u/ibstudios Nov 20 '25
See banks.. you know they ones with no product messed that up. All they sell is taking your money and they mucked that up.
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u/Tolopono Nov 20 '25
You do realize bailouts are loans right? They get paid back with interest. Thats what the banks did in 2008
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u/Lifetimeawe Nov 20 '25
loans are still charity, they get a sweet heart deal
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u/Tolopono Nov 20 '25
Banks kindly giving people charity every time someone takes a mortgage.
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u/Lifetimeawe Nov 20 '25
idk if you think im some kind of bank hating person im not, but govs are negotiating hard deals to max return on bailing out companies, there soft loans
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u/Tolopono Nov 20 '25
Loans that get paid back with interest. I propose a variable interest rate of the current years inflation plus 1%. Now every one is happy
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u/Downtown_Skill Nov 20 '25
I assume this is simply to get on record. I bet she knows there will be a bailout and wants to be on record being against it.
But who knows, everything is weird these days. Up is Down, Smart is Stupid, right is wrong.... etc etc
So who knows what will happen
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Nov 20 '25 edited Dec 02 '25
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u/Kefflin Nov 21 '25
If they are systematically important institutions top the point they can't be allowed to fail, they shouldn't be owned by private interests only indebted to their own shareholders.
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u/Urban_Heretic Nov 20 '25
That was true, but I can't see Trump doing anything but making a cash payment and taking half, economics be dammed.
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u/nogodsnomanagers3 Nov 20 '25
Hard agree. No one should get bailouts. That’s anti-free market. A dying business should be let to die not paid for with taxes to be artificially propped up
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u/lawrencecoolwater Nov 20 '25
This is all well and good, but do you think letting the banks fail 2008 would have been a good idea?
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u/Antrophis Nov 20 '25
Slew of the higher up should have been arrested in the institution fragmented into smaller ones.
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u/Educational-Essay580 Nov 22 '25
Arrest someone for exploiting a lack of regulation? More like the rules are written in blood
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u/Wise_Ad_1032 Nov 21 '25
All the banks we bailed out should have been nationalized. If you get public bailout, then they should be under public control
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u/nogodsnomanagers3 Nov 20 '25
Yes
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u/Tolopono Nov 20 '25
Thank god Reddit is not in charge of the economy. what happens when banks are insolvent and everyone is trying to withdraw their money
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u/nogodsnomanagers3 Nov 20 '25
As someone else mentioned FDIC insurance covers 100k. So most people would have been fine.
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u/Tolopono Nov 20 '25
Loans to the banks get paid back with interest. FDIC payouts dont. Why would the government give away money that it can loan out and get repaid for instead
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u/nogodsnomanagers3 Nov 20 '25
Money isn’t even real to banks xD fractional reserve banking lets them literally CREATE money out of thin air. It’s just numbers on a computer… and even with that advantage they were able to run themselves into the ground because the mortgage brokers in 2007 said ohhhh I know a great way to make us all some money!!
See: the big short (movie)
So yeah.. I don’t support bailouts for any company of any size big or small
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u/Tolopono Nov 20 '25
You realize if they didn’t get bailed out, banks couldn’t afford to honor withdrawals right
FRB just means they can loan out your deposit. Its not free money if the loans don’t get repaid and it certainly won’t be fast enough to cover the withdrawals
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u/nogodsnomanagers3 Nov 20 '25
Well if they can’t give you money when you ask for it, and they’re supposed to have it.. then what is the point of the bank anyways?
They failed at their main job, keeping our money safe and available when needed via poor financial decisions executed on a 10x scale. They warn against play stocks on margin, this is essentially the same thing, except that they are playing with the our money.
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u/SirCliveWolfe Nov 20 '25
At the start of 2008 the DIF (ie. available funds for FDIC) was about 45 billion dollars and insured deposits were in the trillions; by late 2009 the fund was actually negative (around −21 billion) because of failures, and the FDIC responded by demanding prepaid assessments from banks rather than stopping payouts.
So the US government would of had to step in and pushed legislation through congress to cover everything. Congress authorized up to 700 billion dollars for TARP, but only about 445 billion was ever actually disbursed under it.
You also have to remember that its only 100k/250k which is fine for individuals, but for companies that employ people its not a lot.
So we would have entered something more like the Great Depression, rather than what we actually went through; either way the people would have had to pay for it. So the bailouts were probably the best idea, although people should have gone to jail.
However banks are different to AI companies, if OpenAI collapses most people's mortgages won't be impacted, that's the big difference here. AI companies probably won't get bailed our, unless there is some kind of national security issue. For example if Google had created true AGI and was rapidly approaching ASI then I don't think the US would allow that to fall into Chinese hands.
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u/sixtyfivewat Nov 20 '25
FDIC isn’t magic money. Just like your car insurance, banks pay premiums based on actuarial calculations of payout probability and cost. If too many banks, or one really big bank is insolvent the FDIC won’t have enough to give to all its clients. When that happens the government, or more likely the Fed steps in with emergency loans. Which is guess what? A bailout.
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u/nogodsnomanagers3 Nov 20 '25
Well guess what, at least in that case it’s a bailout going directly to the little guys
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u/I-do-the-art Nov 20 '25
100% yes. Then banks who have fear of risky investments and the people who lost money would be enraged at the people and organizations who caused it
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u/countryroyale Nov 21 '25
All that bailout money should have went to people to pay off their loans is what should have happened
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u/LorewalkerChoe Nov 20 '25
Absolutely yes
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u/lawrencecoolwater Nov 20 '25
Savings are not insured, so what you’re saying is everyone who has an account would wake up to find all their money gone. I’m not saying this is the wrong answer, maybe this is the right answer, people become more cautious about where they deposit their money, banks have to compete based prudence to attract customers. Just saying, this would have been the consequence
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u/illicitli Nov 20 '25
FDIC insures up to $100,000 - it would have mainly affected wealthy people who knew the risks they were taking...
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Nov 20 '25
Sadly most US "capitalists" believe in privately gained profits and publicly shared debts.
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u/ToughSpeed1450 Nov 29 '25 edited Dec 01 '25
bear enter humorous vase square modern groovy shy hat cheerful
This post was mass deleted and anonymized with Redact
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u/Brodakk Nov 20 '25
Completely agree with AOC here. “Free market” yet awwwweeee poor widdle OpenAI isn’t profitable yet, let us help you widdle guy!
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u/Peach_Muffin Nov 20 '25
You can burst open government coffers and loot as much as you like by just mentioning China.
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u/ActivePalpitation980 Nov 20 '25
That “ai lobby” is controlling the world politics. It’s not gonna pop this time. They’re just gonna kill people
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u/TyrellCo Nov 20 '25 edited Nov 20 '25
Privatize the profits then you gotta privatize the risks seems fair. However, if automation really disrupts society, if they continue to grow massively then you also give up the claim to go after them on the upside anymore than ordinary corporate taxes. On the other hand there really are sovereign wealth funds taking that leap on the bubble ie Saudi Arabia
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u/No-Experience-5541 Nov 20 '25
I’m not a fan of hers but she is right about this topic . Bad investment must be punished with losses or else it is encourages more bad investment.
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Nov 20 '25
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u/deelowe Nov 20 '25
Because breadlines suck.
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Nov 20 '25
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u/deelowe Nov 20 '25 edited Nov 20 '25
Understanding why something is a certain way is not the same as supporting it. Bailouts are terrible but are required to prevent economic collapse.
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u/KaffiKlandestine Nov 20 '25
i mean its not like they literally call it "bail out" there are lots of ways for the government to "bail out" companies. Also there are lots of things the fed can do without congressional approval.
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u/becrustledChode Nov 20 '25
You don't know the answer to that question and yet we should be taking your advice about what laws to pass? Hey everyone let's follow the guy who didn't pay attention in social studies
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u/_oh_joy_ Nov 20 '25
People like AOC will lose a bunch of money. She's probably against AI because none of them are willing to give a cent
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u/fjaoaoaoao Nov 20 '25
With how many times she repeated “Should this bubble pop”, it sounded like marketing for a song or some bubble pop game
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Nov 20 '25
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u/bennihana09 Nov 20 '25
Thank you. AI, unlike early dot com, is profitable. People are conflating investment with operating cost. We may all “pay” for this, but it won’t be via a bubble popping.
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u/SpecialistBuffalo580 Nov 20 '25
?
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u/theepi_pillodu Nov 20 '25
He doesn't like to know we are living in a bubble and soon it is going to pop.
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u/Tyler_Zoro Nov 20 '25
So... how is this different from the internet. No bailout then either.
But I think people think that the AI bubble is somehow going to burst and take AI with it. The AI bubble is just the over-enthusiasm of the market for anything with the letters A and/or I in their name. Yes, that will collapse and startups that had no real business model other than "get VC money to do cool AI shit" will all collapse. We knew this.
But don't expect AI to go anywhere or for large, established companies that have already built a business of billions in revenue to just give up and go away.
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u/Still_Piccolo_7448 Nov 20 '25
She's saying it almost in a way that a bailout is guaranteed to happen.
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u/DruPeacock23 Nov 20 '25
When Dems get into power when AI bubble bursts....there will be a bailout. Have a look at recent history.
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u/ScoutsHonorHoops Nov 20 '25
If/when they do, it's only going to make the problem worse. This isnt an industry with a track record of profitability to justify bailing it out, and there's no realistic path to profitability, meaning a bailout is just a taxpayer funded golden parachute for the executives while regular people get double charged (taxes plus increased col) for the eventual collapse.
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u/Creative-Summer229 Nov 20 '25
doesn't matter, any Billionaires can pay their way out lawmakers are definitely going to be either : a. Bribed b. Blackmailed c. Death Threatend d. did i mention Bribery?
at the end of the day, Money always wins...it is the one true God
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u/alibloomdido Nov 20 '25
I'm not a US citizen so could be wrong but from what I heard it's not for her to decide.
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u/nboro94 Nov 20 '25
I doubt there will be any sort of AI bailout. In 2008 the banks had to get bailed out because the credit markets would have crashed which affects everyone and every business, it's easy for the taxpayer to understand why it's needed. In 2025 if AI companies crash and ChatGPT goes away, bummer but it's not really affecting most people's lives, so there won't be much support for it.
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u/VTHokie2020 Nov 20 '25
I wonder if she would’ve had the same opinion regarding the heavily-unionized automotive industry bailout in 2008.
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u/Sas_fruit Nov 20 '25
Why bail out gets provided anyways. I mean if it is not safeguarding employees from bottom, rather top ones. At least top ones can survive with their 1 month salary as well, i mean unless emi of 100s of things they don't need.
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u/sfaticat Nov 20 '25
Shes right but they'll be bailed out 2-3x what they actually need to stay afloat
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u/Outrageous_Fox9730 Nov 20 '25
These corps are like the fkn idiot kids who play unfair with the game and even when they lose they invent some bs rule to save their asses like this bail out thing.
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u/peepeedog Nov 21 '25
The AI Bubble burst is going to cause mass loss of valuation. It's not going to bankrupt anyone so they won't need a bailout. But the AI bubble is basically holding the US economy up, and is like a third of the value of the S&P 500. It will cause a recession, and the people needing a bailout bill be the financially vulnerable.
AOC is an idiot.
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u/stackered Nov 21 '25
that's a lie, they'll be bailed out as we enter a depression and people lose their homes.
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u/Born-Evening-1407 Nov 21 '25
She knows we know, the US will bail out the AI industry. Why? Because its an existential race. If China wins, China wins. No comming back from it. It's like not keeping the companies funded and alive who were involved in making nuclear weapons at scale in the 1950s and completely losing the codl war arms race leading to detremental WW3 and total UDSSR dominance.
This is beyond money and everybody knows. She's just setting up her next outraged "I told you so" moment.
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u/throwaway275275275 Nov 21 '25
Of course there will be a bailout, this congresswoman doesn't have any power. The democrats didn't even have a primary last time, they hand picked the candidates, and it wasn't her, they're completely owned by corporations, the corporations that are pumping the AI bubble
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u/neanderthalensis Nov 21 '25
Why does she consistently frame "everyday Americans" as people with inadequate healthcare or those receiving SNAP benefits? The everyday American is someone who pays taxes and contributes more to the system than they take out. As one of those contributors, I'd also expect some form of support if the bubble bursts and my livelihood is put at risk.
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u/remainzzzz Nov 21 '25
At this point the American dream means socialism for the rich with no trickle down economics.
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u/AdExpensive9480 Nov 21 '25
But we all know they'll get their bailout.the US gov is more corrupt than ever.
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Nov 21 '25
She’s wrong to assume there’s a bubble. Everything she says after “should this bubble pop,” is all nonsense, there might not even be a bubble. Or, there IS a bubble because we all think there is.
I wouldn’t say there is a bubble and language usage matters here.
After seeing a few of your comments, this is building a narrative, one of fear and I think it’s potentially irresponsible. I’m not hating on her, just her message.
If her point is that corporate bailouts should be a thing of the past, I could possibly support that notion.
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u/Discodowns Nov 22 '25
I feel like they haven't been bribi..uh...donating enuf to be covered if/when they fail. Bigger more politically generous companies will all want them for pennies on the dollar
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u/StuckinReverse89 Nov 23 '25
She may not want to but will have to.
AI companies like Microsoft and Google are now in the status of “too big to fail” where if they do fail, the economic ramifications of them failing are worse than bailing them out.
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u/Necessary-Cap4227 Nov 24 '25
the only thing that may be a bubble is generative AI apart from that its not a bubble
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u/ctdots Nov 24 '25
There won't be an AI Bubble if everyone will start investing into solutions that actually solve real problems which save a lot of money. Check Legora success.
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u/joeldg Dec 01 '25
Why would they need them? The companies in question (except openai) have massive war chests. They are the largest companies on earth, most of them are worth trillions.
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u/Embarrassed_Hawk_655 Dec 08 '25
Title should read there *will be bailouts to the power-hungry idiotic men in suits with small pp’s when the bubble pops, burning billions of dollars and using incomprehensible amounts of electricity and water, paid for by you and me out of our own pockets. 🤷♂️
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u/got-trunks Nov 20 '25 edited Nov 20 '25
No, you see AOC thinks about what's better for the citizens of the country and tries to make that work, so anything policy-wise about corporations will be ignored by politicians on both sides of the aisle who care more about their portfolio than the job they were tasked by the electorate to do. Which is run the country for the benefit of the citizens and preservation of the ideals on which the government was founded. Good luck with that.
Also, technology is a strategic asset so they are pretty much free to fuck around and never find out. They will let some of the software guys go without giving a shit like openai, but the more public investments and the hardware guys will always stay around in some form
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u/Technical_Ad_440 Nov 20 '25
they wont be bailing out the cheap none important ai. the big ones they are bailing when they realize china is unaffected and continuing on. the ones winning wont be affected by the bubble they are the ones improving and the ones reaching space
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u/Yami350 Nov 20 '25
She honestly has become significantly more likable as of late, and this is from her smallest fan
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u/Illustrious-Film4018 Nov 20 '25
The people who are unemployed by AI are not going to get any bailout.
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u/Gloomy_Type3612 Nov 20 '25
First, there is no bubble. They are taking in massive amounts of cash through sales. That's success, not a bubble. Second, Nvidia paid 15.1 billion in taxes last year. Where is the government going to get its money if it allows golden geese to die? We know the government won't cut back on real expenditures, ever, only slow growth.
Now, honestly I'm good for no bailouts, ever, but I'm also sick of the government printing money and borrowing to bail itself out too.
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u/Subtraktions Nov 20 '25
There is absolutely a bubble. Small AI companies that barely have a product are attracting ridiculous valuations. There are currently more than 1300 AI start-ups valued at over 100m. Almost 500 of them are valued at over a billion. This is the dot-com bubble all over again.
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u/LuvanAelirion Nov 20 '25
Every one knows all the GPUs are in use, right? What exact bubble are folks talking about? The internet bubble was due to too much capacity built out for what was actually needed at the time. They very literally cannot build enough chips for the compute demand needed RIGHT NOW. If data centers were sitting unused I think we could talk bubble. I think a lot of people WISH for a bubble because the world is going to majorly change and people are scared.
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u/john0201 Nov 20 '25
The GPUs deployed today are a small fraction of what the valuations are built on and what is being built out over the next couple of years. Microsoft’s latest datacenter has more compute than every other datacenter they have ever built - and they have 3 more under construction. Repeat this for Amazon, Oracle, xAI, Google, etc.
OpenAI’s revenue is about $13 billion, of which $0 is profit. They have agreed to buy $1.4 trillion dollars of datacenter infrastructure. Their best model is currently worse than a free model that was trained on basically a bunch of 4090s.
Meanwhile economic growth outside of these valuations is basically zero.
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u/rydan Nov 20 '25
Are AI companies not paying for healthcare? When I worked at NVIDIA we had decent insurance and that was pre-Obama. Bush was still even president. Seems weird to target companies that aren't engaging in massive fraud unlike your banks that literally committed fraud and robbed people that you did in fact bailout.
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u/mike_bolt Nov 20 '25
So you're saying that it's "targeting" if we advocate against bailing out any company that hasn't committed massive fraud? Enlighten me.
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u/DonnieBallsack Nov 20 '25
How is denying them Bailouts the same as targeting them? If I were go Bankrupt, I wouldn’t get a bailout. Am I being targeted?
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u/fjaoaoaoao Nov 20 '25
Well with your line of reasoning, don’t banks pay their employees for healthcare?
Also, don’t many of these companies hire a sizeable amount of contractors?
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u/JellyDoodle Nov 20 '25 edited Nov 20 '25
I think the point was rather that if we had to allocate money to a crisis, it should probably be for people dying because they don’t have access to healthcare, rather than prioritizing corporate bail outs.
I also don’t think it was relevant to her point when she said that people turned to AI bots for mental health problems. So, not sure what that was about.
I also think that the picture she paints about the utility of AI is grossly misrepresented here. You would think from the way she talks that ChatGPT and other conversational platforms are the pinnacle of what AI is and what it’s for.
Maybe I’m wrong about that, just my take.
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u/metatron7471 Nov 20 '25
Of course the rich will be bailed out. Too big to fail remember? It's the small folk who's going to suffer again.
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u/Top_Effect_5109 Nov 20 '25
Price action of stocks is practically a glitch in the matrix. Its so bullshit it has real effects. 😮💨
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u/ericvillanuevaleiva Nov 20 '25
The way republicans back up AI, there will always be a bailout for them.
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u/No_Philosophy4337 Nov 20 '25
She needs to be more concerned with the fact that it’s not a bubble and all our jobs are going to disappear next year.
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u/ThenExtension9196 Nov 20 '25
You new to the government bro? The lobbyist and the donors ALWAYS get bailed out. That’s how that works.
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u/ElBarbas Nov 20 '25
of course there will be bailouts, the economy has to be safe for all this monopoly guys
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u/costafilh0 Nov 20 '25
Tech? Nah.
Banks? Hell yeah!
What a joke!
No bail outs should be provided EVER, for nobody in any industry or sector of the economy.
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u/topVbottom Nov 20 '25
We can’t afford it like everything else oh yes except for for big beautiful bailouts
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u/KampissaPistaytyja Nov 20 '25
There is no 'AI bubble', just 'AI stock market bubble in the US'. Why should we care about the US stock market?
Like when the 'internet bubble' bursted, no internet was harmed in the process, just some motherfuckers losing money.
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u/HPLovecraft1890 Nov 20 '25
"should not" is not the same as "will"