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Comments (417)

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  theandrewbailey
  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
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  bushido
  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...
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  benrutter
  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.
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  Sol-
  Is there any indication that such a bailout was even planned or is this just populist tilting at windmills?
• arn3n
  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.
• cmiles8
  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.
• jfengel
  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.
• legitster
  > 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 processesI 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.
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  armchairhacker
  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.
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  tqi
  No bailout is fine but I think the gross thing about this is it's clear they also hope these companies fail.
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  tyrabound
  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.
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  delichon
  Better to just oppose all bailouts for all sectors, always.
• jgarzik
  Yet more meaningless political theatre.This generates ZERO passed bills, but lots of pre-election rage bait donations.End-stage Alexis de Tocqueville material.
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  boringg
  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.
• drivebyhooting
  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?
• chollida1
  The US media using the abbreviation Reps to mean representatives and Republicans at the same time is very confusing.
• MadrasTh0rn
  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
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  jrflo
  Isn't the purpose of a bailout to stop a larger economic collapse rather than save a company?
• hodder
  Everyone is so convinced that AI is bubble, it is hilarious. This market doesn't look extended to me given the fundamentals.
• vlucas
  Why does this even need legislation? Isn't this the default for all companies?
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  freakynit
  Is anyone noticing that from past few days, a certain level of "priming" has started with such articles appearing more and more?
• PaulKeeble
  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.
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  giwook
  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...
• wryoak
  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
• ferguess_k
  Guess the big AI companies are not paying enough donation to them.
• QuantumNoodle
  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.
• asow92
  Excuse my ignorance, but aren't we screwed either way?
• luckycharms810
  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.
• torginus
  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.
• anon
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• 1vuio0pswjnm7
  https://web.archive.org/web/20261030122836if_/https://progre...Not sure why there's a Google Drive URL for the resolutionAlternative to Google Drive:https://progressives.house.gov/_cache/files/f/c/fc0cb325-7d5...https://web.archive.org/web/20261030122958if_/https://progre...
• andsoitis
  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.
• b0rbb
  Let them fail.
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  qaq
  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.
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  clbrmbr
  isnt Anthropic already too-big-to-fail?
• iugtmkbdfil834
  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...
• bluecalm
  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?
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  bilsbie
  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?
• rfrm
  This is the dems version of “No more endless wars”
• Varelion
  AI companies maybe shouldn't be riding the coat tails of other people's money, intellegence, nor IP.
• anon
  undefined
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  talkingtab
  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?
• pwdisswordfishq
  For a second I was hoping that the bubble was already bursting.
• tangotaylor
  > the billionaire AI boys who created the problemNiki Parmar: am I a joke to you?
• clutter55561
  Nonsense. The losses will be swallowed by the government, i.e. the tax payers, in the name of “National Interest”.
• Magicrafter13
  So, they've discovered capitalism?
• stego-tech
  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.
• nisten
  Soo does this mean RAM is gonna get cheaper or more expensive?
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  woodpanel
  a) How courageous for them declaring wanting to ban something that isn't being proposedb) 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 mindc) 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.
• deadbabe
  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.
• FrustratedMonky
  ? 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.
• russli1993
  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.
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  ineedaj0b
  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.
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  anon291
  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
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