David Sacks, the newly appointed White House AI and Crypto Czar under President Donald Trump, has drawn a firm line in the sand regarding government aid for artificial intelligence companies.
Sacks made his position clear on Thursday, stating there will be no federal bailout for AI firms, as reported by CNBC. He pointed to the competitive landscape, noting the U.S. already boasts at least five major players in frontier AI models, ready to step up if one stumbles.
This declaration wasn’t pulled from thin air, but came as a direct response to remarks by OpenAI CFO Sarah Friar, who hinted at a federal “backstop” during a recent conference. Her words sparked immediate pushback, forcing her to clarify her intent on LinkedIn, though the initial suggestion lingers like a bad aftertaste.
Friar’s original comment about seeking a federal guarantee to support OpenAI’s infrastructure investments raised eyebrows across the tech and policy spheres. She later walked it back, claiming her point was about building industrial capacity through private and public collaboration, not handouts.
“As the full clip of my answer shows, I was making the point that American strength in technology will come from building real industrial capacity which requires the private sector and government playing their part,” Friar wrote on LinkedIn. Her retreat from the term “backstop” feels more like damage control than conviction, especially when innovation should stand on its own two feet.
Sacks, for his part, didn’t mince words in dismissing any notion of a safety net. His view is simple: if a company can’t sustain itself in a field as dynamic as AI, others are waiting in the wings to fill the void.
“The U.S. has at least 5 major frontier model companies. If one fails, others will take its place,” Sacks posted on X, hammering home the reality of a free market. His logic cuts through the haze of corporate pleas, reminding us that survival isn’t guaranteed, nor should it be.
The idea of a bailout for AI firms, even if unintended by Friar, smells of the kind of overreach that stifles genuine progress. Why should taxpayers foot the bill for private ventures when competition is already fierce enough to drive results?
Sacks also offered a nod of goodwill, suggesting he didn’t believe anyone was seriously angling for a bailout. “To give benefit of the doubt, I don’t think anyone was actually asking for a bailout. (That would be ridiculous.),” he wrote, with a subtle jab that lands without drawing blood.
While Sacks shut down the bailout idea, he didn’t leave the industry entirely out in the cold. He emphasized the Trump administration’s focus on streamlining permitting and power generation to speed up infrastructure projects without hiking residential electricity costs.
This approach signals a preference for clearing bureaucratic roadblocks over writing blank checks. It’s a refreshing pivot, prioritizing practical help over the progressive tendency to throw money at every problem.
The balance here is delicate, ensuring that AI companies have the tools to grow while keeping the public’s burden light. Sacks seems to understand that innovation thrives under pressure, not pampering.
As this debate unfolds, the message from the White House is unmistakable: AI giants must stand on their own merits. Handouts won’t be the answer, no matter how much infrastructure costs weigh on corporate ledgers.
The contrast between Friar’s initial float of a federal guarantee and Sacks’ swift rejection highlights a broader tension in tech policy. Should the government play babysitter, or let the market sort winners from losers?
For now, Sacks’ stance offers a clear path, one that champions competition and cuts through the noise of entitlement. If AI is to shape America’s future, it must do so through grit and ingenuity, not by leaning on Uncle Sam’s shoulder.
