U.S. Treasury Secretary: "No Systemic Problems in AI Boom... It's Different from Pets.com"

Remarks come amid growing concerns over AI infrastructure investments
"The world's smartest people are betting 99% of their net worth on AI and believe in it"

U.S. Treasury Secretary Scott Bessent dismissed concerns about the growth of the artificial intelligence (AI) industry at a private investor event, saying, "I don't see any systemic problems." His comments came as concerns mounted in the market that the recent AI investment boom could collapse like the dot-com bubble.

According to the Financial Times (FT) on October 21, Bessent made the remarks at an investor event in New York the previous day.

U.S. Treasury Secretary Scott Bessent.

During a discussion with Bridgewater CEO Nir Bar Dea, Bessent was asked about AI. "I'm good at identifying when something is going wrong with the system," he said. "I don't see any systemic problems."

At the event, Bessent expressed optimism that AI would boost U.S. productivity and contribute to economic growth. He also said data centers and AI companies had not adequately explained the benefits of AI technology to the general public.

"This isn't Pets.com," he said, distinguishing the current boom from the dot-com bubble. Pets.com was an internet company that went public shortly before the dot-com bubble burst in 2000.

"The smartest people in the world are putting 99% of their net worth into these companies and have built the most profitable companies in the world," he said. "They believe in AI."

Bessent's comments came amid growing debate over whether the recent surge in AI stocks has gone too far and concerns about the massive infrastructure investments by AI companies.

The fact that the event was held privately also drew attention. It was hosted by JPMorgan Chase and the Robin Hood Foundation, a charity founded by billionaire hedge fund manager Paul Tudor Jones. Financial industry executives and investors attended, but the event was not open to the press.

Former Treasury Secretary Janet Yellen said that while in office, she always spoke at Robin Hood Foundation events that were open to the press. She told the FT that she was mindful of the risk of appearing to provide sensitive information to only a small group of market participants.

A Treasury Department spokesperson said Bessent was well aware of nonpublic information that could affect markets, given his 35 years of experience in the financial industry, and that everything he said at the event had already been discussed publicly.

There are no rules restricting the Treasury secretary from meeting with a large number of market participants without the press present. By contrast, the Federal Reserve (Fed) recommends that members of the Federal Open Market Committee (FOMC) speak at events attended by the press and make their remarks public.

This content was produced with the assistance of AI translation services.