Senator Elizabeth Warren is demanding the Trump administration come clean about potential plans to bail out AI companies with taxpayer money. In a formal letter to White House AI advisor David Sacks, Warren warns that Trump's cozy relationships with tech executives could lead to another too-big-to-fail scenario where taxpayers foot the bill for risky AI investments.
The AI industry's financial house of cards just caught Washington's attention. Senator Elizabeth Warren fired off a pointed letter to the Trump administration Monday, demanding answers about potential taxpayer-backed bailouts for AI companies that are burning through billions with little to show for it. Warren's letter, addressed to White House AI advisor David Sacks and Office of Science and Technology Policy director Michael Kratsios, cuts straight to the heart of a brewing controversy - whether the government will step in when AI's investment bubble finally bursts. "President Donald Trump's close ties with AI executives and donors raise concerns that the Administration will bail out AI executives and shareholders while leaving taxpayers to foot the bill," Warren wrote in the formal inquiry. The timing isn't coincidental. OpenAI has been sending mixed signals about government support. CFO Sarah Friar suggested in a recent New York Times interview that the government could "backstop" the company's AI investments before quickly walking back the statement on LinkedIn. But Warren's digging revealed something more concrete - OpenAI quietly sent a letter to Kratsios in October requesting that the Trump administration expand the government-funded Advanced Manufacturing Investment Credit. The credit, originally designed for semiconductor manufacturers, would be stretched to cover AI server production and data centers. CEO Sam Altman tried damage control last week, insisting that OpenAI "does not have or want government guarantees for OpenAI datacenters" and that "taxpayers should not bail out companies that make bad business decisions." But the numbers tell a different story. AI companies are hemorrhaging cash on infrastructure while struggling to generate matching revenue. OpenAI's $300 billion Project Stargate deal with Oracle and represent massive bets on a technology that hasn't yet proven its commercial viability. The disconnect between AI spending and returns has industry watchers asking . Warren's suspicions aren't unfounded. Tech executives have spent months courting Trump through White House dinners and strategic donations. to building a White House ballroom, moves that Warren and other lawmakers have characterized as . David Sacks pushed back earlier this month, that "there will be no federal bailout for AI." But Warren isn't buying it. "While Mr. Altman has claimed that the company is not looking for a 'bail out,' actions suggest that it may be pursuing a deliberate strategy to entangle itself with the federal government and the broader economy so the government has no choice but to step in with public funds," Warren argues in her letter. Her comparison is stark: "We have seen this before: take on enough debt, make enough risky bets, and then demand a taxpayer bailout when those bets go south so the economy does not crash." The senator's questions are specific and pointed. She wants to know if the Trump administration has any plans to provide financial backstops for or other AI firms. She's asking what kind of government assistance officials plan to offer these companies, and whether they believe the Advanced Manufacturing Investment Credit should extend to AI buildout. The deadline for answers is December 1st, giving Sacks and Kratsios just two weeks to respond. Warren's inquiry comes as the AI industry faces mounting scrutiny over its financial sustainability and growing political influence.
