Senator Elizabeth Warren is demanding answers from OpenAI CEO Sam Altman about whether the company plans to seek a government bailout as it burns through cash on a trillion-dollar spending spree without turning a profit. In a letter sent today, the Massachusetts Democrat warns that OpenAI appears to be setting up taxpayers for the classic move of privatizing profits while socializing losses, just as fears mount that the AI bubble might be ready to pop.
OpenAI is facing its toughest Congressional scrutiny yet. Senator Elizabeth Warren just put CEO Sam Altman on notice, demanding he guarantee the company won't come crawling to taxpayers for a bailout if its massive spending bets go sideways.
In a letter sent today, Warren pulls no punches. She's worried OpenAI "has committed to more than a trillion dollars in spending despite not yet turning a profit" and "appears to be seeking government assistance should it prove unable to pay its bills," according to the letter obtained by The Verge. The Massachusetts Democrat, who serves as ranking member on the Senate Committee on Banking, Housing, and Urban Affairs, warns that the company is preparing to fall back "on the classic strategy of privatizing profits and socializing losses."
It's a legitimate concern given the scale of money flowing through Silicon Valley's AI infrastructure boom right now. Companies like OpenAI are pouring billions into data centers, chips, and computing power with no clear path to profitability. Warren specifically calls out the company's relationship with CoreWeave, noting the cloud provider is "saddled with debt" to fulfill its contract with OpenAI, which has "comparatively little debt on its own balance sheet." That kind of circular spending arrangement, Warren argues, creates systemic risk for the entire US economy.
This whole mess traces back to November, when OpenAI CFO Sarah Friar accidentally said the quiet part out loud. During an interview, Friar suggested taxpayers should "backstop" the company's hefty infrastructure investments. The backlash was immediate and fierce. Friar quickly backpedaled on LinkedIn, and Altman jumped on X to stress that does "not have or want government guarantees for OpenAI datacenters."
