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Executive Order Provides For Bailout Of Overextended AI Companies
In December 2024 President Donald Trump named venture capitalist David O. Sacks as the “White House A.I. & Crypto Czar.”
Sacks is set to guide the administration’s policies for artificial intelligence and cryptocurrency.
AI-researcher Gary Markus is wondering how two recent tweets by Gary Sacks relate to each other:
One theory of capitalism holds that every company should be left to their own devices, with state intervention kept a minimum. This view was well articulated just a few weeks ago, by White House AI and Crypto Czar and well-known podcaster, David O. Sacks:
David Sacks @DavidSacks – 16:52 UTC · Nov 6, 2025
There will be no federal bailout for AI. The U.S. has at least 5 major frontier model companies. If one fails, others will take its place.
The other theory of capitalism, if we can indeed call it that, holds that we should bailout important companies or industries that might overextend themselves. Quite the opposite from the above.
This latter theory, almost a form of safety-net socialism for overextended companies, seemed to be implied today, in a tweet that seemed to be laying the groundwork for bailout, by none other than … White House AI and Crypto Czar and well-known podcaster, David O. Sacks:
David Sacks @DavidSacks – 17:34 UTC · Nov 24, 2025
According to today’s WSJ, AI-related investment accounts for half of GDP growth. A reversal would risk recession. We can’t afford to go backwards.
The WSJ report Sacks mentions, archived here, is indeed gloomy:
The economy’s dependence on AI comes with risks. Stock price/earnings ratios are near record highs. If lofty profit predictions prove wrong, share prices may tumble and investment could slow. The S&P 500 fell about 2% last week on concerns about a bubble, despite rallying 1% on Friday.
Falling stocks could trigger a reverse wealth effect: Americans would consume less, which would tend to depress sales, profits and, potentially, employment.
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If AI investment stopped growing, that could knock another 0.5 point off growth, Millar estimates. If it went to zero, that would knock a full percentage point off.
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Another risk relates to the growing scale of AI-related borrowing.
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If the revenue necessary to service that debt doesn’t materialize, lenders could take a hit, spilling over into debt markets, said Berezin.
China is letting the first type of capitalism reign their Artificial Intelligence efforts:
Rather than pick winners and losers, China states the policy objective and hundreds of commercial initiatives compete using diverse strategies to fulfil the ambition. Instead of a ‘winner takes all subsidies’ China gets a diverse, agile, ecosystem growing in parallel to its rapidly innovative economy.
Many Chinese models are published as open source and can be run on smaller clusters.
The U.S. has however decided to let the second form of capitalism rule its AI endeavors. There are only a few companies working on large AI projects. Their models are private and blocked from scrutiny. They are promising too much and are spending a huge amount of money. They are in need of ‘safety-net socialism for overextended companies’.
To provide for this the White House issued an Executive Order on:
LAUNCHING THE GENESIS MISSION
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered:
Section 1. Purpose. From the founding of our Republic, scientific discovery and technological innovation have driven American progress and prosperity. Today, America is in a race for global technology dominance in the development of artificial intelligence (AI), an important frontier of scientific discovery and economic growth. To that end, my Administration has taken a number of actions to win that race, including issuing multiple Executive Orders and implementing America’s AI Action Plan, which recognizes the need to invest in AI-enabled science to accelerate scientific advancement. In this pivotal moment, the challenges we face require a historic national effort, comparable in urgency and ambition to the Manhattan Project that was instrumental to our victory in World War II and was a critical basis for the foundation of the Department of Energy (DOE) and its national laboratories.
The Department of Energy is ordered to direct the initiative combining federal laboratories and ‘industry partners’:
Within 90 days of the date of this order, the Secretary shall identify Federal computing, storage, and networking resources available to support the Mission, including both DOE on-premises and cloud-based high-performance computing systems, and resources available through industry partners. The Secretary shall also identify any additional partnerships or infrastructure enhancements that could support the computational foundation for the Platform.
The federal government will of course have to pay for those private resources.
Research with the help of AI will be done in six high priority fields. The timeline provided in the Executive Order is extremely ambitious.
Besides providing the instruments for a bailout the Executive Order is also creating the means of central control over AI and its application:
If you strip away the branding, Genesis is the U.S. government building a national AI backbone inside the Department of Energy and then inviting the biggest private sector AI players to plug into it.
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But underneath, it centralizes the AI stack. Instead of letting the highest end compute and model capabilities drift entirely into the private sector, Genesis pulls them back into a structured federal environment. Access becomes conditional: follow the safety rules, share the data, integrate into the platform and you get to operate at the frontier. Don’t, and you’re on the outside looking in.
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Genesis is the beginning of a nationalized AI infrastructure strategy. It will function as the bridge between government compute and private sector models, letting Washington influence which companies sit closest to the frontier and which capabilities get priority. It will speed up real scientific breakthroughs, but it will also quietly define the rules of the AI race on who participates, who gets access, and how the most powerful systems are directed.
By allowing for a bailout of over extended AI companies via ‘Manhattan Project’ sized federal spending Trump is also attempting to prevent a stock market slump that would cost the Republicans the majority in the House.
You can’t call it:
“safety-net socialism for overextended companies”
– because the privately owned companies (owned by oligarchs), are the OPPOSITE of Socialism.
However, you can call those bailouts:
“socialization of private losses”
– which is a typical move of crony capitalism, where immoral oligarchs control the corrupt NON-representative (non-democratic) government.
For usually ignorant ‘mericans, you could go away with your completely wrong use of the word “socialism”, but I won’t let you do that on my watch.
We had a very extensive, years long discussion, about this topic during the Euro-Zone crisis, where the Europeans victims of the €URO-Zone macroeconomic imbalances (that benefit Germany and other core countries, but harm peripheral countries, and obviously Germany REFUSES to fix this monetary union), when we (Portugal, Spain, Greece, Italy, Ireland, Cyprus) were forced to SOCIALIZE the losses of the 100% PRIVATE/CAPITALIST banks.
If it were Socialism, the regulation would have avoided those excesses of the banks, and would have NATIONALIZED the banks, ao that later the profit of the now-healthy banks belongs to the people.
It’s exactly the same situation as with the AI bubble. The banks were also overextended, and the bubble burst started in the USA subprime, and later had its effects all over Europe, in particular in the €uro-zone.
Long story short: what USA is doing right now is 100% Capitalism, crony and oligarchic, only “laissez-faire” in theory. The corrupt Deep State only represents itself, the people are just used/exploited and manipulated in order to remain tamed.
What China does is 100% mixed-economy (you could go as far as calling it a Social-Democracy), with a Communist Party that represents most of the working population and applies the best solutions of both PLANNED Socialism and REGULATED Capitalism, in order to achieve the best results for the collective.
The end results are obvious and indisputable. China as a whole is advancing in all areas. The only ones in USA that advance are the top 1%, and their top employees in each corporation, including the ones in the Deep State, of which Donald Trump and Barack Obama are EQUALLY part.
In order for USA to become a representative people’s true democracy, and for its economical system to actually become based in fair competition and merit, it will take a revolution first. A bloody one. Because the cureent holders of power/wealth will NEVER give up their underserved privileges voluntarily, not even if suddenly a miracle happened and 99% of the voters opened their eyes and demanded it.
You see the current emperor at the White House sending the military to patrol the streets? Yeah, that’s how it ends. It will only get worse, be it Trump or Kamala or the McDonalds clown… until the people’s oppressed by the empire revolt against the capital.
You will face your “476 C.E.” sooner than you think.
Posted by: Carlos Marques | Nov 26 2025 11:32 utc | 221
Ahenobarbus | Nov 25 2025 16:14 utc | 18
In his analysis of the labor process, Marx identified the two components of capital: variable capital, which is the portion of capital that a capitalist invests in wages for the purchase of labor-power, and constant capital, which is all non-human inputs into the production process, including raw materials, machinery, tools and buildings required to produce a commodity. While constant capital transfers its value to the product, variable capital—the labor-power expended by the worker—produces surplus value (the value created by workers in production that exceeds the value paid to them as wages), from which profit is ultimately derived. The rate of profit is defined by Marx as the ratio of surplus value generated by variable capital to the total capital—variable and constant capital—deployed in the labor process.As the productive forces grow, the ratio of constant capital to variable capital increases. The result is a decline in the rate of profit. This law-governed process is the source of instability and crisis inherent in the capitalist system. However, the necessary effort of the capitalist class to counteract this decline in the rate of profit is the driving force of technological innovation aimed at increasing the efficiency of labor power in producing surplus value. The countervailing factors also include expansion of trade, the acquisition of new sources of “cheap labor” and, as we have reviewed, the increasing reliance on credit and debt to artificially increase profits, even as the underlying ratio between constant and variable capital grows increasingly unfavorable.Over the last year, Wall Street has been engaged in a frenzy of speculative investment in Artificial Intelligence and associated automation technologies. It seems to be the realization of the dream of every corporate CEO. A way of drastically lowering labor costs has been found. And, in fact, corporations, within the US and internationally, are in the process of implementing massive job cuts.Across industries from logistics to auto manufacturing to aerospace to telecom to banking, firms are implementing massive AI systems that eliminate clerical roles, customer support, coding, financial modeling and thousands of other functions that formerly provided employment.In the UK, major corporations have announced significant AI-driven layoffs. BT plans to cut up to 55,000 jobs by 2030, with approximately 10,000 positions expected to be replaced by AI and automation in customer service and network management. Aviva is eliminating 2,300 roles in insurance operations following its Direct Line acquisition. BP is cutting 6,200 jobs—15 percent of its office-based workforce—by the end of 2025, with CEO Murray Auchincloss citing AI efficiency gains as part of cost-reduction drives.The same process is sweeping through Western Europe. In Germany, Siemens has eliminated 5,600 industrial automation jobs; Lufthansa, 4,000 administrative roles; ZF Friedrichshafen faces 7,600 to 14,000 job losses tied to automation; Telefónica is cutting 6,000 to 7,000 jobs amid AI restructuring.However, whatever the short term increases in profitability that are achieved by individual corporations, the net effect of the vast displacement of human labor, the source of surplus value, is an accelerated rise in the ratio of constant to variable capital, and, therefore, a systemic decline in the rate of profit.The billionaire seeks to counteract the crisis through ever more violent processes—attacks on working conditions, the evisceration of social programs, mass deportation programs, wars, genocide. The oligarchy, cornered by its own internal contradictions, lashes out with increasing desperation. The militarization of American cities, the support for fascism, the promotion of war against Russia and China—these are not rational policy choices. They are the convulsions of a dying system.
That’s very clear, thanks Ginge !
Posted by: Sarlat La Canède | Nov 27 2025 17:39 utc | 261
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