After four straight days of market declines, MS NOW host Stephanie Ruhle sounded the alarm over growing anxiety about a potential artificial intelligence investment bubble, with possible inflated valuations and rising debt among the biggest tech companies fueling concern among investors.
In a recent interview with The Wall Street Journal, OpenAI Chief Financial Officer Sarah Friar suggested the federal government could provide financial support to the company and “backstop” its investments. Friar’s comments set off a firestorm of criticism, including from Democratic Sen. Elizabeth Warren of Massachusetts, who urged the federal government not to bail out Big Tech companies.
On Wednesday’s “The 11th Hour,” Ruhle laid out why AI companies may be angling for federal support.
“In theory, the argument they are making is that it is not just about one company,” she explained. “It’s about building out our national AI infrastructure so we can compete and win the global race for AI. But if things go south and the stock market falls off a cliff, then the government might need to step in to protect this bet on the future.”
However, Ruhle said government intervention could come at a cost. “But if taxpayers bail out the tech companies, then what’s to stop those companies from taking even bigger risks?” she asked. “If everything works out, they win huge — and if it doesn’t, we, the taxpayers, are left holding the very big bag.”
The MS NOW host said that with concerns over the economy rising, she wouldn’t rule out a possible bailout from Donald Trump’s administration. “So if the stock market were to suddenly tank, and Trump sees it as a measure of his own success, there is every possibility that he will step in and help out these tech giants,” she said. Ruhle also reminded viewers of Trump’s close relationship with some of the biggest names in tech, who would likely be the beneficiaries of any bailout. “Remember, these are the giants that showered him with campaign donations,” she said. “Their CEOs had front-row seats to the inauguration, and some of them have even joined him for private dinners.” “Almost 20 years ago, the government bailed out banks that people thought were too big to fail. What is stopping Trump from doing the same thing if the AI bubble bursts?” Ruhle asked. You can watch Ruhle’s full analysis in the clip at the top of the page.
Allison Detzel is an editor/producer for MS NOW.
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