U.S. Treasury downplays AI bubble risks at closed-door investor event

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Treasury downplays AI bubble risks

Highlights

Bessent at a closed Robin Hood conference in New York argues there is no systemic problem or dotcom-style bubble in AI stocks.
Investor concern grows over debt-financed AI infrastructure, but Bessent insists recent Treasury comments merely reiterate prior public statements.
The Robin Hood event, which raised over $1 million this year and nearly $72 million across 14 years, restricts press access despite featuring major market figures.

Private conference comments on AI and markets

As first reported by the Financial Times, Bessent makes the remarks at a closed Robin Hood charity conference in New York convened with JPMorgan Chase, where tickets cost at least $7,500 and the press is not admitted.

Speaking in a 30-minute interview with Bridgewater chief executive Nir Bar Dea, Bessent says he does not see a “systemic problem” with AI and pushes back against comparisons with the dotcom era. He says advances in the technology are likely to benefit the American economy, although he adds that data centre and AI companies have done a poor job explaining those benefits to the broader public.

Bessent also says, “This isn’t Pets.com,” referring to one of the last technology initial public offerings before the dotcom bubble peaks in March 2000. He argues that founders and executives with most of their wealth tied to these businesses continue to believe in the sector’s long-term prospects.

Disclosure debate and policy context

The comments come as some investors question whether the rally in AI-related stocks has gone too far and worry about the scale of debt issuance used to finance infrastructure such as chips and data centres. Even so, there are no rules preventing the Treasury secretary from addressing a large private group of market participants without journalists present.

A Treasury spokesperson says everything Bessent says at the event has previously been stated in public and criticises scrutiny of a fundraiser that raises more than $1 million to support New Yorkers living in poverty. Robin Hood chief communications officer Kevin Thompson says the conference has long operated as an off-the-record forum and has previously featured sitting and former administration advisers and cabinet members.

The annual event has raised nearly $72 million over 14 conferences, with all ticket proceeds going to the Robin Hood Foundation’s anti-poverty work. Higher-tier sponsorship packages cost $100,000, while other speakers this year include investors Stanley Druckenmiller and Steve Cohen.

The format contrasts with the approach described by former Treasury Secretary Janet Yellen, who says she is careful to have the press in the room at speaking engagements because of the sensitivity around sharing information with selected market participants. Federal Reserve policymakers are also advised to appear at events attended by journalists, although those standards do not apply directly to the Treasury secretary.

Our earlier article on the US AI data center buildout examined how soaring funding costs, construction delays, and power constraints are testing the sector’s rapid expansion plans. We noted that only a minority of proposed projects are viewed as truly viable, while cost overruns and financing pressures are starting to weigh on investor confidence and the outlook for AI-related infrastructure companies.

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