No Bailouts for Big Tech Billionaires: Policies for When the AI Bubble Bursts
The piece warns the AI investment boom is a bubble that will burst, and argues policymakers should not bail out Big Tech or venture capitalists, instead designing protections for the public and the broader economy.
Background
- The Open Markets Institute is a U.S. antitrust think tank that warns against excessive corporate concentration. It argues the current AI investment frenzy (trillions spent on data centers, chips, and energy) resembles a speculative bubble that will eventually burst.
- "Big Tech" refers to Alphabet (Google), Amazon, Apple, Meta (Facebook), and Microsoft — companies whose market valuations depend heavily on AI promises. Their CEOs have collectively lost billions in paper wealth during past tech corrections.
- The central policy question: if the AI bubble pops and these companies face financial distress, should the U.S. government bail them out (as it did banks in 2008)? The piece argues "no" — and proposes specific rules like pre-committing to no bailouts, breaking up monopolies now, and preventing Big Tech from buying up failed AI startups.
- This builds on a long debate about "too big to fail" — the idea that some firms are so systemically important their collapse would wreck the economy, forcing taxpayer rescues. The authors say Big Tech is not systemically critical like banks, and bailing them out would entrench monopoly power.