Washington, D.C. — House Democrats are now preparing for the AI bubble to burst.
On Oct 28, Congressional Progressive Caucus Chair Rep. Greg Casar (TX-35) and House Financial Services Ranking Member Rep. Maxine Waters (CA-43) co-led a 7-page House resolution warning of economic risks posed by an artificial-intelligence-related asset bubble, opposing a bailout of corporations or executives impacted by a collapse, and affirming support for workers instead.
Cosponsors: Danny Davis, Chris Deluzio, Valerie Foushee, Jesús “Chuy” García, Pramila Jayapal, Analilia Mejia, Delia Ramirez, André Carson, Jan Schakowsky, Brad Sherman, Rashida Tlaib.
What it says:
Instead of rescuing them with taxpayer money, lawmakers want failed AI companies to go through ordinary bankruptcy — wind down or reorganize, not emergency lending, capital injections or debt guarantees from Fed, Treasury or FDIC.
The resolution says:
- Oppose any measure that rescues insolvent AI-related firms or shields senior executives from accountability for reckless conduct.
- Oppose exceptional regulatory support for AI firms and related financial sectors if they become insolvent during an AI downturn.
- Require that resolution processes promote competition, help workers, and prioritize pension and retirement fund holders.
- Senior executives who took excessive risk or acted unlawfully should be held fully accountable under civil and criminal law, including clawback of gains.
The lawmakers note AI firms hold trillions in debt, much raised in opaque private credit markets, and S&P estimates Amazon, Microsoft, Alphabet, Oracle, Meta and SpaceX will collectively spend more than $7 trillion on AI capex between 2025-2030. Tech giants expected to borrow record $420 billion in 2027 alone, up 60% from 2026. Meanwhile price-to-earnings ratio of stock market is almost as high as peak of 1990s dot-com bubble.
“Big Tech billionaires are making increasingly reckless bets on AI. They got richer off Trump’s deregulation and Republican tax breaks. Now they expect taxpayers to bail them out if those bets go bad. We won’t let them,” said Casar. “AI companies that fail should go bankrupt, and executives who commit fraud should be held accountable. Federal help should go to workers and retirees.”
Waters: “Big tech and Wall Street are taking enormous risks with billions in borrowed money to fuel the AI boom, despite growing warning signs of a dangerous bubble and if it all comes crashing down they should not expect taxpayers to rescue them.”
The resolution invokes 2008 crisis as warning — where financial sector received trillions in liquidity without accountability. Instead, it supports fiscal stimulus, unemployment insurance, nutrition support, rental and housing aid if AI bubble collapse triggers job losses.
Important caveat:
This is a non-binding simple House resolution, a sense of the House, does not require Senate or President approval. But it sets political marker ahead of 2026 midterms. Poll Oct 21 ABC/WaPo/Ipsos: 57% of Americans say AI is bad for society.
*Tags:* #AIBubble #Bailout #GregCasar #MaxineWaters #ProgressiveCaucus #BigTech #Bankruptcy #2028Crisis #PrivateCredit #Taxpayers