Robert Rubin warns AI boom carries financial and social risks

Former US Treasury Secretary Robert Rubin warned that the AI investment boom could raise productivity while creating financial and social risks that markets may underestimate, Bloomberg reported.

Speaking at the Greenwich Economic Forum on Tuesday, Rubin highlighted commitments linking AI companies, suppliers and lenders. A company failing to meet its obligations could trigger losses across that network, he said.

Rubin also questioned whether AI investment would produce adequate returns. He expects some companies to succeed and others to struggle.

Bloomberg reported that borrowing by data center and AI software companies has contributed to concerns about global financing costs. US 10-year Treasury yields reached their highest level since 2002 this week.

Rubin said fiscal uncertainty and inflation could undermine confidence in government and weigh on investment. He disputed the idea that AI productivity gains would resolve US fiscal problems.

He warned that lawyers, accountants and other knowledge workers could face displacement, arguing that the US lacks effective programs to manage the transition.

Rubin also raised AI safety concerns and the challenge of introducing safeguards while competing with China. He said the US remains an attractive investment destination but needs a political system capable of addressing long-term problems.