OpenAI CEO Sam Altman was forced to publicly state that his startup won’t ask for a government bailout if it fails, following the company’s CFO's expression of hope for some federal support. This naturally sparked a frenzied debate.
Everybody’s already talking about the AI bubble. Tech companies continue to splurge on AI, but Wall Street analysts are questioning the spending spree, as they struggle to see how these AI investments in infrastructure and data centers will translate into revenue.
A lot is at stake: we’re talking about hundreds of billions of dollars and the fact that it’s the ballooning tech valuations that are holding the markets together. A slump has already begun, and there are immediate discussions that the US economy is showing signs of slowing.
Friar’s comment: careless or calculated?
The general public is also interested. New Google Trends data, analyzed by AI app developer Flywheel Studio, shows that searches for the term “AI bubble” are now higher than at any other point since Google began tracking data.
“We're watching history repeat itself with massive investment in AI technology without clear profitability. The public is right to be concerned about inflated valuations and unsustainable spending,” said Erik Goins, founder of Flywheel Studio.
“If this bubble bursts like the dot-com one, the survivors will be companies that built actual value, not just raised the most money. Investors and businesses need to ask hard questions about ROI now, not after the crash.”
Adding fuel to a fire, OpenAI’s chief financial officer, Sarah Friar, raised quite a few eyebrows this week when she suggested that the US government should “backstop” the company’s aggressive investments in AI infrastructure.
“The backstop, the guarantee, that allows the financing to happen, that can really drop the cost of the financing but also increase the loan-to-value, so the amount of debt that you can take on top of an equity portion,” Friar said at a Wall Street Journal event.
In other words, OpenAI would like a federal government “backstop” for the debt AI companies take on to make chip investments.
Friar soon walked back her comments, but they were already being roasted left and right as they seemed to imply that the US government – thus, taxpayers, too – should be on the hook if OpenAI (a private company valued at $500 billion) can’t figure out how to pay for all that stuff it said it will.
Rushing to become too big to fail?
Even the White House AI Czar, David Sacks, decided to intervene, saying on X: “There will be no federal bailout for AI. The US has at least five major frontier model companies. If one fails, others will take its place.”
There will be no federal bailout for AI. The U.S. has at least 5 major frontier model companies. If one fails, others will take its place.
undefined David Sacks (@DavidSacks) November 6, 2025
For what it’s worth, Sacks also said he didn’t think “anyone was actually asking for a bailout.” That’s also what OpenAI CEO Altman clarified on X late on Thursday.
Altman reiterated that the company “does not have or want government guarantees for OpenAI data centers” and added: “We believe that governments should not pick winners or losers, and that taxpayers should not bail out companies that make bad business decisions or otherwise lose in the market.”
I would like to clarify a few things.
undefined Sam Altman (@sama) November 6, 2025
First, the obvious one: we do not have or want government guarantees for OpenAI datacenters. We believe that governments should not pick winners or losers, and that taxpayers should not bail out companies that make bad business decisions or…
He did, however, muse that the federal government could consider investing in its own semiconductor fabrication plants, which the AI companies would support after receiving loan guarantees.
Finally, Altman said that OpenAI expects to earn $20 billion in revenue this year and plans to grow to “hundreds of billions” in annual revenue by 2030.
For a company that made a $12 billion loss in Q3 alone but has committed to spend $1.4 trillion on AI infrastructure by 2033, that’s certainly ambitious.
That’s probably why people will keep googling “AI bubble” and asking the big question whether OpenAI is rushing to become too big to fail – just like all those banks that were bailed out after the 2008 crash, unlike the millions of Americans who lost their homes and jobs.
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