Treasury Has an Internal Report Warning About the Dangers of an AI Bubble - News of the United States - NOTUS

Oh, marvellous — the US Treasury has produced an internal report warning that the AI market might be a bubble, and they've even compared it to the dotcom era. Because nothing says 'decisive action' like a draft report that may or may not see the light of day. The report, obtained by NOTUS, notes that AI firms are 'more deeply entrenched in the economy' than their dotcom predecessors were. So the bubble, if it bursts, won't just take out some pet food delivery startups — it'll take out chunks of the banking, healthcare, and logistics sectors. But hey, at least the Treasury has a warning on file, so when the whole thing collapses, they can say 'we told you so' from the rubble.

The report's dotcom comparison is particularly rich. Remember the dotcom bubble? That one ended with trillions in losses, a recession, and a lot of people realising that Pets.com was not, in fact, a viable business. Now imagine that, but every company is convinced it needs its own 'AI transformation' or it'll be left behind. The Treasury draft warns that current valuations are disconnected from fundamentals — a shocking insight that anyone who's looked at a stock chart for Nvidia could have provided for free. But this is the government we're talking about; they need a committee, a report, and three consultants to state the bleeding obvious.

So what will come of this? Probably nothing. The report is internal, meaning it's one step away from being buried in a drawer. The Treasury could issue guidance, or jawbone, or even suggest regulatory tweaks. But given the lobbying muscle of Big AI and the general political paralysis, the most likely outcome is that the warning gets filed alongside all the other prescient reports that nobody acted on. The dotcom comparison is apt — but not in the way the report intended. The real lesson of the dotcom era is that everyone saw it coming, and nobody did a thing. Cheers.