House Democrats push resolution to let failing AI firms go bankrupt, not bailed out

Two House Democrats want Congress on the record before anything breaks: if the AI boom goes bust, nobody gets rescued with public money.

On October 28, 2026, Reps. Greg Casar and Maxine Waters introduced a resolution declaring that Congress should firmly oppose federal bailouts for AI companies facing insolvency.

What the resolution actually says

The measure goes beyond direct cash rescues. It also opposes any exceptional regulatory support for AI companies, or for related financial sectors, that hit insolvency during a downturn in the AI market.

In place of a rescue, the resolution points struggling firms toward standard bankruptcy procedures. That is the same court process any other insolvent business would face.

The lawmakers present bankruptcy as the fairer path. Under ordinary procedures, the resolution argues, priorities for workers, consumers, pension holders and competition are upheld.

There is also an accountability piece. The text calls for senior executives who engaged in excessive risk-taking to be held responsible for those decisions.

Now the important caveat: this is a non-binding resolution. It does not require approval from the Senate or the President.

Why the timing matters

The resolution is a response to mounting concern over how much money major tech firms and Wall Street are borrowing to fund the AI build-out.

Waters zeroed in on that debt. She said the risks Big Tech and Wall Street are taking with borrowed money are growing as signs of an AI bubble appear.

She also stressed that lessons from earlier financial crises need to be applied so history does not repeat itself. Warnings about a potential speculative bubble in AI have drawn comparisons to the 2008 financial crisis.

Public opinion appears to be on their side. Recent polling shows that more than two-thirds of Americans favor letting failing AI companies go through regular bankruptcy rather than receive government assistance.