It's clear that American capitalism and AI are now fully intertwined. Either they both collapse or they both succeed. This bubble is actually too big for the government to bail out and if it tries it'll probably just bring the American dollar down with it, like tying helium balloons to the Titanic.

1.) The Fed is tightening because of hot and worsening inflation

2.) The bubble pop doesn't pose systemic risk to the US economy

3.) AI companies hardly employ any Americans (that's the entire point)

4.) There's already direct precedent for letting the tech bubble pop (dotcom)

5.) AI is politically toxic with voters

6.) The bubble has been widely known to the public for YEARS while AI companies consciously ignored the risks and warning signs

7.) No amount of bailouts will fix a business model that sells $100 bills for $1

8.) The bailout would cost $30T (two thirds of the current US debt)

9.) The US government is broke at these debt to GDP levels

10.) A bailout is wishful thinking from AI bagholders

And yet, for anyone who believes we’re on the path to true AI these are all irrelevant.

It's not about the employment though, it's the financial macroeconomics. A third or so of the US's stock market is AI companies. Let's say they all go to zero, it basically cuts a third off the US's paper wealth and a third off the US dollar's value (which is primarily based on the stocks you can buy with it). The government doesn't want that to happen so it'll try to prevent the stocks from going to zero. The cure may be worse than the disease but this government won't realize it is.

The Fed has no statutory duty to the stock market.

The Fed is subordinate to the executive, even if it thinks it isn't.

If the executive is bankrupt they might use the trillion dollar coin loophole or they might just actually take control of the Fed.

That would be just about the fastest way you could spike US Treasury yields into a debt crisis.

And let's not forget that the US is heavy into short term debt that needs to renew: "As of Q3 FY2026, approximately 33% of U.S. publicly held marketable debt is due to mature and require renewal (refinancing) within 12 months."

I bailed on the S&P when oil shock concern was first expressed earlier this year.

I will get back into a non-U.S. total market index fund (VXUS or equivalent) after the dust settles with Iran.

I will wait on buying the S&P, and perhaps QQQM, until after the Anthropic IPO at the very least.

> 9.) The US government is broke at these debt to GDP levels

Well that one is false. They print and debase any income or wealth held in USD.

So their print-against base is any and all assets held in USD globally.

The Japanese are also not broke, they've merely spent the past two decades destroying the Yen and chopping down the Japanese standard of living. Print, print, print.

The interest payments on sovereign debt need to be coverable with tax revenue unless you want hyperinflation (real hyperinflation, not meme hyperinflation). The US can't afford interest payments to be any larger.

Real hyperinflation is a possibility.

>It's clear that American capitalism and AI are now fully intertwined.

in what world is that clear lol, American capitalism will do just fine, if the AI companies go down before they can offload all their crap on retail investors the lion's share of the losses will go to the private investors currently writing checks.

The broader banking system isn't exposed, the housing market isn't exposed, the average American would take a 10% hit of on their retirement account but that'd be it. It'd wipe out a fair amount of the tech sector but they're all sitting in California and don't win anyone elections so no point to bail them out