Rep. Alexandria Ocasio-Cortez is worried about an AI bubble.
The New York Democrat sounded the alarm about the issue at a House hearing on AI chatbots on Tuesday, wading into a debate that’s been raging in the tech world for months.
Pointing to the fact that AI companies like Microsoft, Google, Amazon, and Meta have been driving a disproportionate amount of growth in the stock market and the economy, Ocasio-Cortez said that “the exposure of this industry and this investment, I fear, has reached broad levels, potentially, of the American economy.”
“We’re talking about a massive economic bubble,” Ocasio-Cortez said. “Depending on the exposure of that bubble, we could see 2008-style threats to economic stability.”
She also said that if such a bubble were to pop at some point in the future, there should be no federal bailout of AI companies.
“We should not entertain a bailout of these corporations, as healthcare is being denied to everyday Americans, as SNAP and food assistance is being denied to everyday Americans, precipitating some of the very mental crises that people are turning to AI chatbots to try to resolve in themselves,” she said.
It comes after OpenAI CFO Sarah Friar suggested that a federal “backstop” may be needed to support the company as it embarks on an infrastructure buildout. She later walked back those comments, and OpenAI CEO Sam Altman said that the company isn’t seeking any guarantees from the government.
Ocasio-Cortez is one of the first members of Congress to publicly weigh in on whether there’s an AI bubble.
Fears of an AI bubble are generally driven by circular spending in the tech industry, along with questions about whether Big Tech’s increasing levels of spending on AI infrastructure will ultimately be offset by eventual profits. Others have pushed back on the idea that we’re in a bubble, pointing to high demand for AI products and compute. Wall Street will be looking for any signs of industry weakness when leading AI chipmaker Nvidia reports earnings on Wednesday after the closing bell.
Ocasio-Cortez said on Tuesday that the pressure to generate profit is driving companies to develop exploitative AI chatbots.
“People’s deepest fears, secrets, emotional content, relationships can all be mined for this empty promise that we’re getting from these companies to turn a profit,” Ocasio-Cortez said.
