'Working People Will Pay a High Price': Report Warns AI Bubble Is 'Primed to Pop'

Key Points:

• A report by Open Markets Institute and Americans for Financial Reform Education Fund warns that the AI investment boom is a financial bubble fueled by risky debt and circular financing agreements, which artificially inflate revenues and overvalue global stock markets.
• The report cautions that if the AI bubble bursts, working-class Americans could suffer significant harm, urging lawmakers to avoid government bailouts for failing AI firms and instead prioritize support for affected workers and communities.
• It criticizes past government bailouts during the 2008 financial crisis and calls for failed AI companies to face legal liquidation without taxpayer-funded rescues, emphasizing the need for stronger financial safeguards.
• Co-authors Maya Jenkins and Matthew Scherer stress the urgency for policymakers to act to protect financial stability and prevent taxpayers from bearing the cost of an AI sector collapse.
• The report follows news that AI company Anthropic posted an $80 billion net loss in early 2026 yet plans a $1.5 trillion IPO, highlighting the disconnect between financial losses and market valuations in the AI industry.