The White House has ruled out a “bailout” for AI companies amid concerns that tech giants would seek government support to prop up a speculative investment bubble.

David Sacks, Donald Trump’s AI tsar, said the US government would not support failing companies.

“There will be no federal bailout for AI,” he wrote on X. “The US has at least 5 major frontier model companies. If one fails, others will take its place.”

Mr Sacks’ comments came after OpenAI suggested it could ask for government support to help finance its $1.4tn spending plans.

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.

— David Sacks (@DavidSacks) November 6, 2025

On Wednesday, Sarah Friar, OpenAI’s chief financial officer, suggested that the company might seek a government backstop or guarantee as it borrows billions to fund spending on AI chips and data centres.

The company has backtracked on the comments over concerns that taxpayer cash would be used to help inflate an AI bubble.

Sam Altman, its chief executive, said on Thursday: “We believe that governments should not pick winners or losers, and that taxpayers should not bail out companies that make bad business decisions or otherwise lose in the market.”

He said OpenAI should not be seen as “too big to fail”, a reference to the financial crisis in which major banks were rescued in order to prevent the wider economy collapsing.

“If we screw up and can’t fix it, we should fail, and other companies will continue on doing good work and servicing customers,” he said.

“We plan to be a wildly successful company, but if we get it wrong, that’s on us.”

AI-related infrastructure spending has been seen as a key driver of US growth, meaning that a sudden collapse in confidence in the technology could have wider effects for the economy.

The spending is yet to be matched by profits or revenues for AI companies, and comes amid scepticism that the technology can deliver on its grand promises.

OpenAI has said it plans to invest $1.4tn (£1tn) over the next eight years, far more than it has raised to date.

The pledges have helped drive the valuations of AI companies such as Nvidia and Oracle to record highs, even though the company has not yet raised the cash needed to fund the spending.

Mr Altman said he expected the company’s annual revenues to grow to hundreds of billions of dollars by the end of the decade.

He said the company had discussed US government financing for microchip facilities, but not asked for any.

Mr Sacks said the Trump administration wanted to make it easier to build data centres and secure electricity supplies. “The goal is rapid infrastructure build out without increasing residential rates for electricity,” he said.

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