Policymakers need to take action to get ahead of an AI revolution that is already on the doorstep of the U.S. economy, said Senator Elizabeth Warren (D-MA), Senator Marsha Blackburn (R-TN), and economic experts at a Vanderbilt Policy Accelerator event in Washington, D.C. At the event, Sen. Warren delivered remarks and was interviewed on stage by VPA Director Ganesh Sitaraman, focusing on the financial foundations of AI–examining debt-driven growth, systemic risk, the lessons of the 2008 financial crash, and the policy choices ahead. Sen. Blackburn delivered remarks on a discussion draft she recently released of legislation to create one rulebook for AI that would protect children, creators, and communities from harm and prevent censorship.
“AI companies are aware of these risks—very aware. Instead of reducing their borrowing, slowing their rate of growth, and cleaning up their balance sheets, they are making the classic billionaires’ move: they are quietly lining up for a handout. They have already lobbied the Trump administration for taxpayer funding and guarantees to cover themselves if things go south. As these firms lay the groundwork for future bailouts, we need to lay the groundwork for future reform now,” said Senator Warren.
“There are countless tech policy issues that demand Congress’ attention, and establishing federal standards on AI to protect Americans and unleash innovation should be at the top of our list,” said Senator Blackburn. “Tennessee is leading the way to ensure American dominance in AI, quantum, and other emerging technologies, and it’s time for Congress to create one AI rulebook that gives companies, researchers, and universities like Vanderbilt the regulatory certainty they need to invest and innovate while ensuring Americans are protected from harm.”
At the event, VPA Director of AI and Technology Policy Asad Ramzanali and economic communicator and VPA Senior Fellow Kyla Scanlon followed the lawmakers with a conversation on Ramzanali’s recent paper, “After the AI Crash,” which underscores that trillions of dollars of capital investment in AI infrastructure are propping up the U.S. economy, yet revenues from AI are not increasing at a rate commensurate to this investment. This overreliance on AI investment, coupled with the opaque and complex financial engineering involved, means that the cost of a market correction could look like 2008—an economy-wide crash with unpredictable and systemic consequences. Ramzanali’s paper calls on Congress to start thinking seriously about and planning for a potential AI crash now and offers a set of proposals for post-AI crash reforms aimed at stabilizing markets, protecting workers, and reforming the industry.
Click here to view photos from the event.
About VPA
The Vanderbilt Policy Accelerator for Political Economy and Regulation (VPA) focuses on cutting-edge topics in political economy and regulation to swiftly bring research, education, and policy proposals from infancy to maturity. To learn more about our work, visit vu.edu/vpa