“You see a bubble when you see one,” Sen. Elizabeth Warren (D-Mass.), who led the push to create a new consumer finance regulator in the wake of the 2008 recession, told a crowd at a Vanderbilt Policy Accelerator event in Washington, D.C., on Wednesday. …
issued 3 hours ago above April 25, 2026, 5 a.m.
by web desk
“You see a bubble when you see one,” Sen. Elizabeth Warren (D-Mass.), who led the push to create a new consumer finance regulator in the wake of the 2008 recession, told a crowd at a Vanderbilt Policy Accelerator event in Washington, D.C., on Wednesday. Warren warned that what she called “shocking” parallels that crisis in the AI industry. Warren said she believes the technology has “huge potential,” but warned that AI companies’ massive spending and borrowing practices are creating a flashpoint that will require Congress to intervene. Warren said the AI industry is growing rapidly, but spending hasn’t kept pace, meaning it doesn’t face the same regulatory oversight that traditional banks face and must borrow from opaque sources like private credit funds. “If AI companies can’t grow their revenues at lightning speed, they won’t be able to service their massive debts,” Warren said. “And because of shady accounting strategies, the first big stumbling block could be everyone running for the exits, leading to destabilizing losses in the financial sector and a repeat of the 2008-style financial crisis.” AI companies have tied their survival to many other sources, including local banks, insurance funds, and pension funds. Warren compares it to a person climbing a mountain and wrapping a rope around their waist that connects them to different places. If it falls, everything will fall. According to Warren, what is the solution? “Cut the rope. There is no rope for AI.” He compared his proposal to the Glass-Steagall Act, which separates riskier investments from commercial banking. Warren also wants a new digital regulator to lead antitrust, privacy and consumer protection enforcement, and for Congress to deny bailouts if the industry missteps. “I cannot overstate the importance of accountability,” she says.
