House Democrats protect bankrupt AI companies from receiving public bailouts
House Democrats have introduced a resolution so that no bankrupt AI companies receive public bailouts.
Behind them are two names that weigh in on the game: Greg CasarTexan and reference of the progressive wing, and Maxine WatersCalifornian and former chairwoman of the House Financial Services Committee. The calendar is not coincidental: the text is presented this Wednesday, six days before the mid-term elections on November 3.
Technically it is not a law or a bill. It is a simple resolution, a statement that reflects the opinion of the House of Representatives and does not require approval of the Senate nor signature of the president.
Its value is political, not legal.
There is little decorative in the content. The text calls for rejecting ‘any measure that rescues insolvent AI-related companies’ and any formula that shields managers from liability for ‘reckless conduct that contributed to the collapse’. Companies in difficulty must be dissolved or reorganized through ordinary bankruptcy channels, preserving competition and protecting workers.
The closing points higher. Executives who took excessive risks or acted outside the law will respond ‘fully through civil and criminal channels’, and pension fund participants will be ahead in the distribution.
No simple resolution stops a bankruptcy. But decide who pays the bill when the time comes.
As a non-binding pronouncement, the text does not create law, does not bind any federal agency nor does it open the door to any vote in the Senate. It does leave a trace in the public record of Congress and establishes in writing where the document will be placed. Democratic Party the day the AI money stops adding up. That, in Washington, is worth more than it seems.
Seven trillion dollars and a record debt: the risk that no one knows who endorses
The numbers explain the rush. S&P estimates that six companies—Amazon, Microsoft, Alphabet, Oracle, Meta and SpaceX—will spend more than seven trillion dollars on investment linked to AI between 2025 and 2030. Around four and a half times the annual GDP of Spain.
The second figure is more worrying in the offices. Goldman Sachs It projects that the largest American technology companies will issue debt for $420 billion in 2027 alone, 60% more than in 2026. Nobody is entirely clear who endorses this liability.: part lives outside conventional financial statements, in third-party guarantees and non-transparent structures.
Nobody signs a blank check.
And there is a third twist. NvidiaAMD and Broadcom have shown interest in investing up to $5 billion together in Goalwhich is seeking billions to expand its infrastructure.
The supplier financing the buyer.
Washington Logic
The important question is not whether the resolution is approved, because nothing is approved. This is why two party heavyweights bother to present it six days before an election. The answer is in 2008. The House rejected the first bank bailout on September 29 of that year and the TARP (the distressed asset purchase program, $700 billion) only went ahead four days later. The Democratic Party learned its lesson: never sign the check again.
There is a second layer, more of a coalition than of principle. Greg Casar represents the progressive wing that has been clashing for years with the donor Silicon Valley; Maxine Waters He comes from chairing the committee that supervises banks and funds. Together they cover the two flanks on which the party would take the hit if the bubble bursts.
Washington does not ask permission.
The electoral numbers push the same. 57% of Americans believe AI is bad for societyaccording to the Oct. 21 ABC News/Washington Post/Ipsos poll, with 64% saying it’s moving too fast, according to AP-NORC.
For Spain, the debate is not foreign. Santander and BBVA participate in syndicated financing of data centers; Utilities sign long-term energy contracts with hyperscalers.
Telephone and Iberdrola They have direct interests in that chain, and their projects are financed in the same markets that now discount greater risk. If Washington sends the signal that there will be no safety net, the cost of capital goes up for everyone.
The invoice will arrive the same.
The exposure of Spanish savings is indirect, but real. The employment plans and index funds marketed in Spain have a relevant part of their portfolio in these six technology companies: it is not a thematic bet, it is the heart of the global indices. The resolution talks about protecting pension participants, and that voter also exists in Madrid.
In Europe the framework is different. The European AI regulation, in force since August 2024, regulates risk, not liquidity, and state aid passes through Brussels with conditions of competition. The next bubble will be managed with two different manualsand no one has yet decided which one prevails.
The projection remains. The elections on November 3 will decide whether the text becomes the official position of the parliamentary group or remains a campaign gesture. Then comes the uncomfortable calendar: the 2027 debt issuance, the financing rounds of Goal and the first visible bankruptcies if the return of AI takes longer than promised.
Case File
- The case: Greg Casar and Maxine Waters introduce a simple resolution calling on Congress not to bail out insolvent AI companies and hold their managers to civil and criminal liability.
- Key data: The text is not binding and does not pass through the Senate; S&P estimates $7 trillion in AI investment between 2025 and 2030, and Goldman Sachs projects $420 billion in technology debt in 2027, 60% more than in 2026.
- For Spain: increased capital costs for projects linked to AI, indirect exposure of Spanish savings via indexed funds and a regulatory contrast with the European regulation, which regulates risk but not liquidity.
