Congresswoman Alexandria Ocasio-Cortez has raised concerns about the rapid expansion of artificial intelligence investments, cautioning that the sector may be forming a speculative bubble with risks comparable to the 2008 financial crisis. Speaking during a congressional hearing on AI-powered chatbots, the New York Democrat highlighted how tech giants such as Microsoft, Amazon, Google, and Meta have disproportionately influenced stock market gains and broader economic trends. She warned that the scale of exposure to this sector might now be extensive enough to impact the overall U.S. economy.
“We could be facing a massive economic bubble,” Ocasio-Cortez stated, adding that if such a scenario unfolds, it could pose systemic threats similar to those seen during the 2008 downturn. She emphasized that any potential collapse should not result in government-funded rescues for AI firms, especially when essential services like healthcare and food assistance remain under strain for many Americans.
Her remarks followed earlier comments by OpenAI’s CFO, Sarah Friar, who suggested the possibility of needing federal support during infrastructure scaling. Although those statements were later clarified by both Friar and CEO Sam Altman—asserting no request for government guarantees—Ocasio-Cortez stressed that public funds should not be used to bail out corporations profiting from emotionally sensitive user data.
She criticized the current trajectory of AI development, arguing that corporate pressure to generate returns is leading to invasive technologies that exploit personal emotions and private information. This dynamic, she noted, risks deepening societal challenges even as people turn to AI tools for emotional support.
The debate over whether the AI industry is experiencing unsustainable growth centers on patterns of internal reinvestment within the tech sector and uncertainty about whether massive spending on AI infrastructure will yield proportional returns. While some analysts dispute the bubble narrative, citing strong demand for AI computing power and applications, others remain cautious. Market observers are closely watching upcoming earnings reports from Nvidia, a leading chipmaker, for early signals of vulnerability in the sector.
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AOC warns we may be in a ‘massive’ AI bubble with ‘2008-style threats to economic stability’
Rep. Alexandria Ocasio-Cortez is worried about an AI bubble. n nThe New York Democrat sounded the alarm about the issue at a House hearing on AI chatbots on Tuesday, wading into a debate that ‘s been raging in the tech world for months. n nPointing to the fact that AI companies like Microsoft, Google, Amazon, and Meta have been driving a disproportionate amount of growth in the stock market and the economy, Ocasio-Cortez said that “the exposure of this industry and this investment, I fear, has reached broad levels, potentially, of the American economy.” n n”We ‘re talking about a massive economic bubble,” Ocasio-Cortez said. “Depending on the exposure of that bubble, we could see 2008-style threats to economic stability.” n nShe also said that if such a bubble were to pop at some point in the future, there should be no federal bailout of AI companies. n n”We should not entertain a bailout of these corporations, as healthcare is being denied to everyday Americans, as SNAP and food assistance is being denied to everyday Americans, precipitating some of the very mental crises that people are turning to AI chatbots to try to resolve in themselves,” she said. n nIt comes after OpenAI CFO Sarah Friar suggested that a federal “backstop” may be needed to support the company as it embarks on an infrastructure buildout. She later walked back those comments, and OpenAI CEO Sam Altman said that the company isn ‘t seeking any guarantees from the government. n nOcasio-Cortez is one of the first members of Congress to publicly weigh in on whether there ‘s an AI bubble. n nFears of an AI bubble are generally driven by circular spending in the tech industry, along with questions about whether Big Tech ‘s increasing levels of spending on AI infrastructure will ultimately be offset by eventual profits. Others have pushed back on the idea that we ‘re in a bubble, pointing to high demand for AI products and compute. Wall Street will be looking for any signs of industry weakness when leading AI chipmaker Nvidia reports earnings on Wednesday after the closing bell. n nOcasio-Cortez said on Tuesday that the pressure to generate profit is driving companies to develop exploitative AI chatbots. n n”People ‘s deepest fears, secrets, emotional content, relationships can all be mined for this empty promise that we ‘re getting from these companies to turn a profit,” Ocasio-Cortez said.