{"id":646217,"date":"2026-05-16T06:30:11","date_gmt":"2026-05-16T06:30:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/646217\/"},"modified":"2026-05-16T06:30:11","modified_gmt":"2026-05-16T06:30:11","slug":"how-the-a-i-bubble-is-being-ballooned-by-donald-trump-and-elon-musk","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/646217\/","title":{"rendered":"How the A.I. bubble is being ballooned by Donald Trump and Elon Musk."},"content":{"rendered":"

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If you already thought the stock market\u2019s booming reactions to this geopolitically chaotic economic moment were irrational\u2014well, it\u2019s about to get much more surreal, because the rules governing the trade are about to change dramatically. You can thank Elon Musk and the Trump administration for that.<\/p>\n

Right now, the indexes are seeing a reinvigorated boom\u2014in spite of coming Strait of Hormuz supply shocks and other mounting recession indicators<\/a>\u2014because investors are looking to what may become the biggest IPOs in history, courtesy of artificial intelligence. OpenAI, Anthropic, and most importantly SpaceX (which now owns xAI) all hope to hit the charts this year with trillion-dollar valuations<\/a>, in an unprecedented global first. It may seem like a great opportunity to get more transparency from these notoriously private firms, but the opposite is likely to happen. The incoming IPO wave is rewriting stock market rules in real time so that companies can attract massive public investment with fewer safeguards, less transparency, and more risk pushed onto ordinary investors, as well as the funds that will determine how comfortably you\u2019ll be able to retire.<\/p>\n

SpaceX, which aims to debut in June and is estimating a public net worth of nearly $2 trillion, will not be like any other ticker. Per the terms of the filing, shareholders\u2019 ability to challenge CEO Musk\u2019s decisions, whether through the board or the legal system, will be so limited<\/a> as to make the chief executive all but invincible. Big banks have already been acquiescing to Musk\u2019s unusual demands, including paying up front for Grok<\/a> subscriptions, thus juicing SpaceX\u2019s flagging A.I. revenue. (The megacorporation actually makes money from its satellite internet services and rocket contracts, but xAI, which includes X and Grok, is a major drag<\/a> on the company\u2019s revenue.) Plus, the Nasdaq and the S&P 500 are making room for SpaceX by rewriting their rulebooks: Pre-IPO SpaceX investors will be able to cash out right<\/a> when the stock goes public, and the index funds that hold your 401(k)s and pensions will be forced to buy up SpaceX stock<\/a> in order to retain their market ties. This is entirely for Musk\u2019s sake; financial institutions are more psyched about the types of investments the megacelebrity CEO can attract, and committed to guaranteeing a baseline level of trading volume<\/a> for this trillion-dollar treasure chest, than they are concerned about those who\u2019ll be most exposed to the stock\u2019s erratic nature. As New York and California pension managers put it in a concerned letter<\/a> to SpaceX, the company will be \u201can unavoidable holding in our portfolios,\u201d even though its unique arrangement scraps any \u201cbaseline protections\u201d for stockholders.<\/p>\n

If you have any financial exposure to an index fund that tracks the Nasdaq 100 and the S&P 500, you\u2019d better hope SpaceX remains a rational and steady stock, because you\u2019ll have no influence whatsoever on the direction Musk takes the company.<\/p>\n

Like Tesla, it\u2019s a trade that revolves around Elon Musk\u2019s whims and distorts typical perceptions of the stock market<\/a> as a rational economic measure, all tolerated so long as some big investors can make bigger money. But a massive IPO alone does not make for a sustainable investment. \u201cWhen a company goes public at such a high valuation, lots of things have to go right,\u201d Jay Ritter, director of the University of Florida\u2019s IPO Initiative, told Reuters. \u201cMost of the time, things don\u2019t go according to plan.\u201d<\/p>\n

One SpaceX adviser even admitted to the Financial Times<\/a> that \u201cfrom a strict corporate finance perspective, the valuation makes no sense. But Elon is great at getting people to dream.\u201d To keep that dream aloft, financiers are now overhauling the entire way markets function in this country so that confidence in executives carries the day over actual economic sense. The entire stock market will soon become, for all intents and purposes, the meme-stock market, and your retirement accounts are at the mercy of its whims.<\/p>\n

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\"\"<\/p>\n

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Federal regulators are also granting more freedom to CEOs and herd-mentality traders. If the Securities and Exchange Commission has its way, publicly traded companies will soon be able to opt out of quarterly financial disclosures by publicizing insights into the state of the business only twice a year<\/a>. That means everyone in the public will know much less about how important, market-leading firms are doing, and why. The SEC is also repealing a post-dot-com-bubble rule<\/a> that requires frequent stock traders to prepare significant cash reserves so as to prevent major losses. Now people with much less money on hand (and more potential losses at play) will get to buy and sell as much as they like, a prospect for which meme-stock market manipulators<\/a> are excited. The sum: A lot more people are empowered to take a lot more risks on a lot less information.<\/p>\n

That\u2019s perfectly OK for Big Tech executives, who\u2019d rather not have you look too closely at how much cash their A.I. ventures are burning. OpenAI\u2019s own CFO is reportedly warning<\/a> that the firm is not financially ready to go public, but CEO Sam Altman is doing everything he can to rush the process and lock in more funds to splurge on computer chips<\/a>. Anthropic has better revenue reports, but it\u2019s also burning up capital way faster than it\u2019s making money<\/a>.<\/p>\n

\u201cAlthough the U.S. stock market is at a record high, a large part of recent gains has been in a few sectors, specifically energy and AI-related companies,\u201d Ritter wrote to me in an email. Typically, such concentration is not healthy for anyone participating in the markets.<\/p>\n

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The dot-com bubble burst provides a useful historical parallel, as the Vanderbilt Policy Accelerator pointed out in a recent report<\/a>: hundreds of thousands of jobs lost, a nationwide recession, and a massive hit to the health of retirement accounts. The A.I. economy is even bigger than that, with far more investor and fund exposure in the works, and a worse-case crash could hit up to $20 trillion in household wealth, per the Vanderbilt report. Even if you personally hold some reliable stocks, even if your index funds are usually trustworthy, even if you have voting shares in a major company, you\u2019re at the mercy of the A.I. companies, their investments, and their fans. If it turns out that some of those projections around data center construction, computing power, product adoption, and eventual profitability were mistaken, you have no recompense or means of influencing the direction of things toward a more sound outcome.<\/p>\n

Despite all this massive risk, the big A.I. firms, led by SpaceX, are going into this stock market to overhaul all those normal rules of play, grant the CEOs more power and blind trust, give the public much less transparency, and throw the meme-stock traders a lot more meat. It\u2019s playing with fire, and the common people will not be unscathed.<\/p>\n

<\/p>\n

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