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0 pointshollerith1mo ago0 comments

I can understand why banks got bailed out by the US gov in 2008, but why would a government feel the need to bail out AI labs?

I hope you are not going to say, "to avoid a global recession or depression caused by the popping of the AI bubble". That would be unnecessary and harmful (in its second-order effects), and governments do have advisors who are competent enough in economics to advise against such a move.

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graemep1mo ago

Can you understand why banks were bailed out to the extent of protecting shareholders?

In the UK the first bank to go, Northern Rock, was simply taken over by the government. The shareholders got nothing. The bailout of Lloyds bank required the government taking a 40% stake. This is the way to go - if you need a bailout there should be a cost to the shareholders. otherwise you are just privatising profit and nationalising risk.

Not that UK regulation was great all round or the bailout perfect. It certainly failed to prevent the crisis which could have been done (no doubt the same applies in many countries). I looked at Northern Rock's accounts some time (an year, maybe?) before the crisis and was horrified by their reliance on interbank lending. it was obvious they could not cope with a rise in rates.

nyargh1mo ago

Bold of you to assume competency will overpower politics in our current era.

hollerithOP1mo ago

So far, the country I know best, the US, has been competent enough to avoid massive corporate bailouts except the aforementioned banks in 2008 and GM. The bailout of GM was not motivated by a desire to avoid a recession when a bubble pops.

If the AI labs become very influential and powerful, Washington might nationalize them, but that would be very different from bailing them out because they have become unprofitable and cannot attract additional investment from the private sector.

Scottn11mo ago

You forgot about the $9b bailout to Intel in August of 2025.

With the recent OpenAi deal with the government I am certain they would throw tons of money at OpenAi if it got real bad. But with upcoming IPO where they are expected to be valued at $840b, we would be a LONG way from them needing a bailout. Well past this current admin.

nyargh1mo ago

Despite politics, TARP was arguably an economic success story for the US treasury despite public sentiment. Whether it created moral hazard or not I suppoae is up for debate.

GM on the other hand should have been left to die.

However, I was obliquely referring to the open transactionality and patronage encouraged by the current administration, and how the AI / big tech players have, with few exceptions, gleefully joined in.

Unless they run out of money for bribes, I think it's inevitable that current government will bend over backwards to prop them up.

attila-lendvai1mo ago

a bailout is a popular way in which public funds lose their publicness.

graemep1mo ago

Do the examples of the banks and GM suggest that it is likely that AI companies will get a bailout to avoid the bubble popping?

The reason the banks bailouts did not involve nationalisation is that the US is very reluctant to nationalise anything.

Capricorn24811mo ago

The U.S. has an admin right now that has made it clear the only important metric for country health is the stock market, which is single-handedly propped up by AI right now.

That's why huge concessions nobody asked for were made to the AI industry in the Big Beautiful Bill.

lukan1mo ago

"but why would a government feel the need to bail out AI labs"

Oh easy, with all the drones and sensors, AI means military power. Those who dare opposing the bailout of the local AI gigants want the other side to win.

j / k navigate · click thread line to collapse

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graemep1mo ago

Can you understand why banks were bailed out to the extent of protecting shareholders?

nyargh1mo ago

Bold of you to assume competency will overpower politics in our current era.

hollerithOP1mo ago

Scottn11mo ago

You forgot about the $9b bailout to Intel in August of 2025.

nyargh1mo ago

Despite politics, TARP was arguably an economic success story for the US treasury despite public sentiment. Whether it created moral hazard or not I suppoae is up for debate.

GM on the other hand should have been left to die.

Unless they run out of money for bribes, I think it's inevitable that current government will bend over backwards to prop them up.

attila-lendvai1mo ago

a bailout is a popular way in which public funds lose their publicness.

graemep1mo ago

Do the examples of the banks and GM suggest that it is likely that AI companies will get a bailout to avoid the bubble popping?

The reason the banks bailouts did not involve nationalisation is that the US is very reluctant to nationalise anything.

Capricorn24811mo ago

The U.S. has an admin right now that has made it clear the only important metric for country health is the stock market, which is single-handedly propped up by AI right now.

That's why huge concessions nobody asked for were made to the AI industry in the Big Beautiful Bill.

lukan1mo ago

"but why would a government feel the need to bail out AI labs"

Oh easy, with all the drones and sensors, AI means military power. Those who dare opposing the bailout of the local AI gigants want the other side to win.

j / k navigate · click thread line to collapse