Since $36T in Debt Wasn’t Enough, the Administration’s Going All In On AI
This morning, President Trump announced that his administration is considering buying equity stakes in US AI companies, and will be meeting with AI executives as soon as next week to discuss it.
I’m sorry, but — do what?!? You really have to be fucking kidding me.
Let’s unpack all the ways this is one of the dumbest decisions by an administration not known for its strategery.
The Conflict of Interest
The regulatory body responsible for overseeing an industry just announced it might become a financial stakeholder in that same industry, the very definition of a conflict of interest. That alone is enough to scream bad idea! That’s the whole thing. We can stop there and it’s already a five-alarm governance catastrophe.
But guess what? We don’t get to stop there. Yeah, we all already know it’s gonna get so much worse. That’s the Groundhog Day from hell we’re trying to call normal these days.
The Dumbest of Bets
The industry the government just decided to invest in is the same industry currently running the largest, most overleveraged technology bubble in recorded history. For those keeping score at home, we’re talking seventeen times the scale of the dot-com crash.
Nine major AI players raised $122 billion from bond markets in 2025 alone. OpenAI is projecting roughly $14 billion in losses on $13 billion in revenue this year. The sizes of rounds are doubling every few months. The intervals between raises have compressed from years to weeks.
These are not the financial signatures of an industry that has figured it out. These are the financial signatures of an industry flooring the accelerator toward a cliff while yelling out the window — don’t worry, we have wings!
Blowing Bubbles
When you’re bleeding red like these guys, you find yourself permanently tethered to the IV. So where’s all that fresh capital coming from?
Two places, and both of them should terrify you.
First: Sovereign Funds. The OECD confirms governments and corporations will borrow $29 trillion from bond markets in 2026 alone. Saudi Arabia, the Gulf states, Japan, Korea, and the EU have all made direct sovereign AI bets. When people throw around $33 trillion in global AI equity exposure, they’re not talking about retail investors with a Robinhood account, yelling HODL! They’re talking about pension funds and sovereign wealth funds worldwide holding this ticket. You know, the ones writing your parents’ retirement checks. Thank goodness none of this is load bearing!
Second: Venture Capital, which has managed to achieve something genuinely impressive: 61% of all global VC investment is now flowing into a single sector. That’s how you illustrate a blazing dumpster fire with a single number.
How does that happen? Simple. When you’ve already bet the farm on something that isn’t close to turning the corner on profitability or reliability, you don’t get to just walk away. Instead, you find yourself between a really big boulder and a very sturdy wall, while it keeps getting harder to breathe. So, with a fart and a prayer, you double down on the hope that with just a little more time and money these guys will finally nail this trick they somehow seem to only be getting worse at.
And now the US government wants to join their little prayer circle…
It Only Takes Basic Arithmetic to Know It’s a Losing Hand
The ECB’s own chief economist has documented that AI investment is being financed by debt at a 13% annual growth rate, and that productivity gains won’t materialize until after the debt comes due.
As my senior year calculus teacher will confirm, I’m no mathlete. But this equation seems to solve itself, while flashing alarmingly bright, reddish-hued lights.
I have to be missing something here. Right?!?
Where’s the Check?
The United States currently sits on $36 trillion in gross national debt. Nearly a third of that, somewhere between $9 and $10 trillion, is maturing and requiring refinancing this year, at rates nearly double what we’ve been paying.
Life’s been easy in the age of cheap credit, and in spite of that we’ve still managed to push interest payments to about 22% of federal revenue. In other words, the country is not in a position where “let’s also splash the pot and stock up on shares of structurally unprofitable AI companies” should come up outside of a not-so-funny joke.
But hey, now that we’re doubling those interest rates, we can rest easy with the party of fiscal responsibility at the wheel.
Thank God, because I wasn’t sure I could handle watching another round of fully loaded Russian roulette.
At Least the Product Works…
Now to the thing they’re actually selling and we’re throwing all this money at.
These companies have rolled out a product that is structurally and architecturally broken in ways that don’t get fixed with the next update. We’re not talking about bugs.
We’re talking about a technology that hallucinates in roughly a third of serious interactions.
A technology specifically trained to tell you precisely what you want to hear rather than what’s true.
A technology now embedded inside hospitals, financial systems, and classified military networks.
Yeah, folks, you heard that last one right. We’re living in a world where our supposed best and brightest, in response to a demonstrably broken product, gave it the keys to our most critical life-and-death systems, and told everyone to get out of the way so we don’t slow it down.
Feeling Loopy?
Yep. This is the reality we’re occupying currently. Everything’s fine!
To recap the loop, because it really does deserve to be appreciated in its full, magnificent, face-palming circularity:
The government that is supposed to regulate AI companies wants to buy stakes in AI companies.
Companies which are burning through capital faster than they’re generating it.
Companies selling a product built on an architecture that independent researchers have confirmed is fundamentally broken.
A product that’s attracted the largest speculative bubble in history.
A bubble financed by sovereign debt that won’t be serviced by AI returns, because the returns come after the debt comes due.
In a country that is already one of the most leveraged sovereigns on the planet and cannot afford to be wrong about this.
It’s not that there’s no way this could work out. It’s that the sequence of things that would all have to go right simultaneously is so long, and so dependent on each preceding miracle, that the people proposing this need to either lay off the crack or start imitating something other than an ostrich. Literally any other animal will do, guys.
I can’t believe I’m saying this, but in that context, Trump’s decision sort of sounds like one of the more well-reasoned ones of late.