Trump AI Chief Rules Out Federal Bailouts for Tech Firms

In a clear signal to the tech industry, David Sacks, serving as President Donald Trump’s AI and crypto czar, said Thursday there will be “no federal bailout for AI” companies. His statement comes amid discussions about how emerging AI firms plan to finance their rapid infrastructure expansion.

Sacks emphasized that the U.S. currently has at least five major frontier AI model companies, and if one fails, others will step in. “The U.S. has at least 5 major frontier model companies. If one fails, others will take its place,” he wrote on X, the social media platform formerly known as Twitter.

The comments follow a statement from OpenAI’s CFO, Sarah Friar, who earlier indicated that the company wanted a government “backstop” or guarantee to support infrastructure investments. Friar later clarified that her remarks were misinterpreted and that OpenAI is not seeking a federal bailout. She explained that her intent was to highlight the role of private sector and government collaboration in building long-term U.S. technological strength.

Sacks also noted that the Trump administration plans to make permitting and power generation for AI infrastructure easier, aiming to speed up construction without increasing residential electricity costs. He added, “To give benefit of the doubt, I don’t think anyone was actually asking for a bailout. (That would be ridiculous.)”

Industry watchers see this approach as a push toward self-reliance among AI startups, ensuring that private capital and competition drive innovation rather than relying on government safety nets. The administration’s focus on streamlined infrastructure support signals an environment where AI growth is encouraged, but with clear boundaries on public funding.