> 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.

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.

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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>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?

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...

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.

> There should never be any kind of bailout that does not lead to public ownership, like any investment

Why no credit based bailouts?

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).

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.

All hail China!

My contention is it doesn't stop a larger economic collapse - it just kicks it down the road and makes it grow even larger.

It's almost like the news is being reported. Very suspicious.

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

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.

I seem to get by fine on the daily without using any LLMs. They’re just-the-right-size-to-fail.

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.

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.

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.

How do you think your personal finances will fare if it's a bubble and it pops?

Exactly. There's never an excuse for a bailout, for any industry.

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.