With the Nasdaq 100 (NDX) on track for its worst week since the reciprocal tariff turbulence in April, President Trump has brushed aside concerns of a bubble in AI stocks.
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When asked by a reporter if he was concerned about an AI bubble, Trump responded, “No, I love AI. I think it’s going to be very helpful. So many things are happening with it.” Trump’s reassurance comes amid the eight largest AI-related stocks losing a combined $900 billion in value since last Friday.
Trump Administration Won’t Bail Out the AI Industry
Earlier this week, OpenAI CFO Sarah Friar hinted that the U.S. government would “backstop” the company’s investments before quickly retracting the statement. However, Friar’s comments quickly propelled rumors that the AI industry faced a capital shortfall, fueling the ongoing tech selloff.
“There will be no federal bailout for AI. The U.S. has at least 5 major frontier model companies. If one fails, others will take its place,” wrote White House AI and Crypto Czar David Sacks in an X post.
AI stocks faced pressure even before Friar’s statement amid concerns of elevated valuations. The Nasdaq 100 currently trades at a price-to-earnings (P/E) ratio of 33.78x, well above its 10-year average of 26.20x.
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