Why would that happen? Extremely little will happen to the US economy if OAI fails. The government has absolutely no reason to bail them out beyond pure corruption.

OAI's most valuable assets are hardware that will be worthless in 6-8 years. The second most valuable assets are the code which other companies are doing just fine with their own. The third is the hype halo that keeps them getting these deals that are disconnected from reality. Nothing there is holding up the economy.

They only have 4,000 employees. If they all lost their jobs, it would barely be a blip in a monthly jobs report. It's not as though millions of people will lose their jobs disrupting the economy like COVID.

The only downside is some imaginary money vanishes and some investors take a haircut on the imaginary money.

> Why would that happen

"National Security", and the usual fluff about "ensuring that the United States remains at the forefront of cutting-edge AI technology". "Adversaries" will almost certainly be mentioned, "China" specifically has a 50% chance to be name-dropped.

Lehman was allowed to go under because hey, their liabilities numbered in the low billions plus they are such dicks anyway. Especially the Dick in charge.

Salient point being, it didn't seem like that big a deal. Compared to the high-powered AI deals it seems like nothing at all.

The next day, an important monetary fund broke the buck because well, they were into Lehman and that was no longer great business.

This was the OG monetary fund, not some fly by night operation and suddenly everyone was redeeming all there was to redeem with a religious fervor. This faith centered around Wall Street Broker the Redeemer, something like that. Not much of a religion but then these are very down-to-earth people.

Then AIG called. They bragged about their stroke of genius idea to raid their vaults for commercial paper, raising well over 10B just like that — paper they didn’t even know they had! Sounds crazy? Read the full story, it’s way crazier than can be put in a paragraph.

Briefly pausing here to let it sink in just how pedigreed the pedigree of these masters of the universe is. They got it all — the degrees, the grit, the genius. Only the creme de la creme get hired for the elevated job at the higher echelons of Wall Street skyscrapers.

But back to the story. The vault loot was impressive but it wouldn’t cut it.

Realizing now the surprising fact of these institutions being interconnected and this contagion well beyond controllable with social distancing (from Lehman), Hank Paulson, the hero of the story (the film version at least, the real story leaves you with a different impression of this shrewd operator) makes the difficult decision to tell the Pres that “oh hey, we’re fked but, idk, a trillion dollars could help a lot”.

His aides don’t like the t-word much, so they kinda vibe out a more palatable number and the rest is bailout history.

If you think Oracle took a risk taking out that loan, think again. That loan is the hedge. A gun to the head of the vaunted Markets, free but admittedly somewhat feeble, makes for a powerful persuasion tactic. They won’t even have to ask for the bailout — Wall Street will do it for them. Systemic risk. Need they say more?

Different than 2008? No doubt. The numbers flying around the DC buildout Ouroboros dwarf the 2008 headscratchers and the companies involved made sure to link up like tentacle monsters getting it on. Interconnected as they were, 2008 investment banks still were somewhat in competition with one another -- the 2026 batch of trouble are in bed with each other.

When you're 30k in debt and insolvent, it's your problem. 30mil in debt, the bank's problem. 30B? Not a problem at all, at least nothing the Fed couldn't solve, for you and the bank. And solve it they will for what's the alternative? Show must go on.

You are speaking like the president is a rational adult who believes in meritocracy