The signs are starting to appear. OpenAI was forced to cut its fundraising target by $10 billion as it struggled to secure investor commitments. AI-specific data center companies, called neoclouds, are suddenly struggling to borrow the billions they need to sustain the data center boom. After jubilant predictions that Anthropic’s IPO would put the company at a valuation of $2 trillion—the highest of any IPO in history—investors told the company it should expect a lower valuation, closer to $1.5 trillion. Then, over Halloween weekend, Elon Musk restricted Grok Bot usage due to “unsustainably high” costs compared to revenue. And in case all that isn’t enough, China’s AI bubble just burst.
Nobody knows when the US AI bubble will finally pop. OpenAI and Anthropic need endless venture capital to sustain their operations, unless they’re able to make it to public markets to raise more cash. But that’s no easy fix, either—private investment giant Blackstone recently told investors that Anthropic may not get an investment-grade rating after its IPO, meaning that it would have to borrow at completely unsustainable interest rates.
Whether it’s next month or next year or even longer than that, at some point the music will stop. So, what comes after the biggest financial bubble in the history of humanity?
The AI bubble bursting would almost certainly tip the US economy into a deep recession, and just like with every financial crisis under capitalism, the billionaires will try to make the working class foot the bill. In 2008, after the housing bubble burst, the US government spent hundreds of billions to bail out the investment banks and insurance companies. Bush and Obama said these companies were “too big to fail” because they were too significant to the rest of the capitalist economy. There was no bailout for the millions of working-class people whose homes were forcibly taken from them, but the stock market criminals who caused the crisis got million-dollar bonus checks.
Today, the imperialist race against China means US imperialism can’t afford to let all the AI companies go under. But after this bubble, we can’t let Trump or Congress (now controlled by the Democrats) use our tax dollars to bail out the tech billionaires. So many working-class families are barely surviving—we refuse to pay for the reckless gambles of the richest people in the history of humanity, so that they can continue plunging the world into increasingly catastrophic disasters.
Imagine if the trillions being spent to prop up these completely unregulated AI companies were instead spent on free universal healthcare and a massive expansion of high-quality public housing. We need to demand democratic public ownership over big tech, and an enormous tax on billionaire wealth. Any big tech bailout would cause massive outrage in US society, and we need to start preparing now to harness it into a powerful fightback against the tech billionaires and their unfettered control of the world.