2008: US Banks pump stocks -> market correction -> taxpayer bailout
2026: US AI companies pump stocks -> market correction -> taxpayer bailout
Mark my words. OpenAI will be bailed out by US taxpayers.
2026: US AI companies pump stocks -> market correction -> taxpayer bailout
Mark my words. OpenAI will be bailed out by US taxpayers.
Banks get bailed out because if confidence in the banking system disappears and everyone tries to withdraw their money at once, the whole economy seizes up. And whoever is Treasury Secretary (usually an ex Wall Street person) is happy to do it.
I don't see OpenAI having the same argument about systemic risk or the same deep ties into government.
Banks needed bailout to keep lending money. Auto industry needed one to keep employing lot of people. AI doesn't employ that many.
I just don't believe bailout can happen before it is too late for it to be effective in saving the market.
The same can happen now on the side of private credit that gradually offloads its junk to insurance companies (again):
As a result, private credit is on the rise as an investment option to compensate for this slowdown in traditional LBO (Figure 2, panel 2), and PE companies are actively growing the private credit side of their business by influencing the companies they control to help finance these operations. Life insurers are among these companies. For instance, KKR’s acquisition of 60 percent of Global Atlantic (a US life insurer) in 2020 cost KKR approximately $3billion.
https://www.imf.org/en/Publications/global-financial-stabili...
Elon owns a competitor and bought the White House.