AFT Demands Financial Regulators Investigate AI Bubble Risks to Workers’ Retirement Security

WASHINGTON-Today, AFT President Randi Weingarten sent a letter to Treasury Secretary Scott Bessent, who chairs the Financial Stability Oversight Council, urging an immediate investigation into serious financial risks from the artificial intelligence sector's rapid debt-laden expansion. The letter from the head of the 1.875 million-member union calls for swift action to address the existential threat these dangers carry for AFT members' retirement security and the U.S. economy as a whole.

AFT members' deferred wages sit in pensions and retirement funds with over $4 trillion in combined assets and include investments in AI-related firms. Weingarten's letter followed concerns expressed by members of the AFT Trustee Council who help oversee those funds.

"The alarm bells could not ring any louder," said Weingarten. "If President Donald Trump won't act to protect working people's deferred wages from the dangers AI poses to the U.S. economy, public officials need to act. Educators, nurses and public employees didn't create this AI bubble, and they shouldn't be the ones who pay for it if it bursts.

"Our members have already lived through one devastating financial crisis that set workers back financially for more than a decade, and we will not stand by while regulators look the other way as Wall Street piles up trillions in hidden debt and circular deals to chase the next valuation high."

The letter was sent ahead of Bessent testifying today before the House Financial Services Committee about the state of the international financial system and before Weingarten meets with members of the AFT Trustee Council to discuss dire warnings from AI executives over the industry's trajectory. This week, Trump brazenly dismissed calls to slow the pace of AI development.

In her letter, Weingarten pressed Bessent and the financial regulatory agency heads that make up the FSOC to disclose information to the public regarding a web of connected hazards: inflated AI stock values clustered among a few firms, a growing mismatch between AI investment spending and AI income, expanding debt kept off balance sheets, questionable accounting practices, round-robin funding deals between AI companies and their backers, and tighter links among private credit, banking, insurers and private equity.

She called on public officials to avoid a repeat of the 2008 financial crisis and reject any future possibility of a taxpayer-financed bailout of AI firms, their leaders or their financiers as a remedy for a crisis engineered, once again, by Wall Street itself.

The AFT letter follows a November 2025 note from 22 members of the House Financial Services Committee and a January 2026 letter from Sens. Elizabeth Warren, Richard Blumenthal, Chris Van Hollen and Tina Smith, both requesting that FSOC form an AI task force and update Congress.

"AI companies' addiction to debt could trigger the next financial crash. It threatens to devastate workers and crush retirement savings. Now big AI companies are considering going public just as our financial regulators have stopped doing their jobs, potentially exposing more families to these risks. Instead of giving Big Tech handouts and deregulating Wall Street, the Trump administration should use the tools at its disposal to safeguard our working-class families and financial system from a potential AI bubble," said Warren, ranking member of the Senate Committee on Banking, Housing, and Urban Affairs.

The Treasury Department's response so far has been to weaken FSOC's ability to guard against financial crises, even as former International Monetary Fund economists have cautioned that a "dot-bomb"-like collapse in AI equities could erase $20 trillion from American household wealth-$3 trillion greater than the loss suffered in the 2008 meltdown.

In response, Warren and Blumenthal proposed the AI Bubble Transparency Act in June 2026 to require FSOC to compile the very data it has so far declined to gather. That legislation has since stalled.

"FSOC exists for exactly this moment," added Weingarten. "It needs to do its job, get the data, tell the public the truth and take steps now to reduce the risk building in our financial system. We need to be clear right now-to both FSOC and our elected officials-that if they fail to act and prevent this bubble from bursting, there will be no bailout for AI behemoths or the financiers behind them if it all comes crashing down."

The full letter can be read here.

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The AFT represents 1.8 million pre-K through 12th-grade teachers; paraprofessionals and other school-related personnel; higher education faculty and professional staff; federal, state and local government employees; nurses and healthcare workers; and early childhood educators.