Trump AI Czar Sacks Rules Out Federal AI Bailouts, Citing Five Major US Frontier Model Companies

Washington D.C. – David Sacks, the White House AI and Crypto Czar, has emphatically stated there will be "no federal bailout for AI," emphasizing the robust competitive landscape within the American artificial intelligence sector. His comments, made on Thursday, November 6, 2025, come in direct response to recent discussions surrounding potential government financial assistance for AI infrastructure development. Sacks' declaration underscores a market-driven approach to AI innovation, contrasting with suggestions of federal intervention.

Sacks' statement directly addressed earlier remarks by OpenAI CFO Sarah Friar, who had discussed the possibility of a federal "backstop" or "guarantee" to help finance the substantial infrastructure investments required by AI companies. Friar's comments, made on Wednesday, suggested the need for an ecosystem involving private equity, banks, and government support to fund these capital-intensive projects. The venture capitalist's firm stance quickly became a focal point for industry debate.

"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," Sacks posted on X.

He elaborated that the presence of multiple leading AI firms ensures market resilience, suggesting that the failure of one company would naturally lead to others stepping in to fill the void. This perspective highlights a belief in the self-correcting mechanisms of a competitive market rather than government intervention.

Following the widespread reaction to her initial comments, OpenAI CFO Sarah Friar subsequently softened her stance. In a LinkedIn post, she clarified that OpenAI is not actively seeking a government backstop for its infrastructure commitments. Friar explained that her use of the word "backstop" had "clouded her point," and she was advocating for a collaborative effort between the private sector and government to build industrial capacity.

While ruling out direct financial bailouts, Sacks indicated that the Trump administration does aim to facilitate the growth of the AI industry through other means. He noted that efforts would focus on making permitting and power generation easier to support rapid infrastructure buildouts. The goal is to achieve this without increasing residential electricity rates, thereby fostering an environment conducive to AI development through regulatory efficiency rather than financial guarantees.