AI hype may soon meet fiscal reality — and, if history is any guide, the American taxpayer will be left raped, holding the bag, while the perpetrators of the bubble will face no real consequences whatsoever.
On the contrary, they’ll be rewarded for their recklessness — the classic “moral hazard.”
Via DW (emphasis added):
“Signs of a hangover are getting harder to ignore. AI usage by corporations is slipping, spending is tightening and the machine learning hype has massively outpaced the profits.
Many economists think usage concerns, barely three years into AI going mainstream, dropkick the prevailing narrative that AI would revolutionize how businesses operate by streamlining repetitive tasks and improving forecasting.
“The vast bet on AI infrastructure assumes surging usage, yet multiple US surveys show adoption has actually declined since the summer,” Carl-Benedikt Frey, professor of AI & work at the UK’s University of Oxford, told DW. “Unless new, durable use cases emerge quickly, something will give — and the bubble could burst.”…
As the gap widens between sky-high expectations and commercial reality, investor enthusiasm for AI is starting to fade.
In the third quarter of the year, venture-capital deals with private AI firms dropped by 22% quarter on quarter to 1,295, although funding levels remained above $45 billion for the fourth consecutive quarter, market intelligence firm CB Insights wrote last month.
“What perturbs me is the scale of the money being invested compared to the amount of revenue flowing from AI,” economist Stuart Mills, a senior fellow at the London School of Economics, told DW.”
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In his characteristically weasely manner, in which coming out and saying anything straightforwardly is too toxically masculine or whatever, OpenAI’s Sam Altman, currently being sued by his sister for allegedly molesting her for the better part of a decade, has issued a pre-emptive demand that the government come to his company’s rescue when the financial speculation bonanza bubble around AI inevitably bursts.
“When something gets sufficiently huge, whether or not they are on paper, the federal government is kind of the insurer of last resort…So, I guess, given the magnitude of what I expect AI economic impact to look like, sort of, I do think the government ends up as, like, the insurer of last resort.”
“Like, totally! I’m just, like, sort of, a Valley Girl [upward vocal inflection] in a Valley world! Where’s, like, the cash, Sugar Daddy Warbucks?”
Sam Altman of OpenAI primes the government cash pump ahead of AI bubble burst, demands '09-style bailout pic.twitter.com/qg6Pg55spV
— Armageddon Prose (@ArmageddonProse) November 14, 2025
(Let’s not forget that OpenAI was founded as a “nonprofit” philanthropic organization that quietly morphed into a “public benefit corporation” before making Sam Altman a billionaire, much in the same way that Google quietly nixed its “Don’t Be Evil” slogan in the dead of night, like a scene out of Animal Farm, and now commits its evil in broad daylight because it knows no force on Earth is going to restrain it.)
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Socialized losses, privatized gains.
As it is, even sans the inevitable government bailout, the AI industry is already a massive welfare leech, hogging electricity and water supplies that the public subsidizes through labyrinthine schemes on the vague promise that someday, at some point, that investment will pay off with lucrative tech jobs.
(No one mentions in the sales pitch, of course, the unspoken clause that all of those jobs will likely be filled by Indian migrants on H1B visas).
The groundwork for the AI bailout was laid long ago when the Trump administration effectively put all its economic eggs in the AI basket.
On literally the second day of his administration, alongside a freakshow trio of a Japanese eunuch, the demonic elf Sam Altman, and the unsettling human-esque martian creature, Larry Ellison, the president announced something called “Project Stargate,” billed as the “largest AI infrastructure project in history,” in which hundreds of billions of American treasure would be poured into the industry that would produce 100,000 jobs “almost immediately.”
(Ten months in, it hasn’t.)
One could be forgiven for wondering cynically, after all of the abuses over the years by bad corporate actors, whether this stunt ten months ago was a ploy to get the administration publicly locked in to the AI agenda, with the understanding that it would be needed many months down the line to bail the industry out when its overblown promises fail to yield any tangible fruits.
