RE: LeoThread 2025-11-08 01-19

[zamaai]

The government has participated in key infrastructure builds. A public submission (posted on the blog) lays out the reasoning and suggests ways the US government can support domestic supply chains and manufacturing.

Comments

[zamaai]

This aligns with stated government priorities. US reindustrialization across the full stack—fabs, turbines, transformers, steel, and more—would benefit firms across this industry and other sectors.

[zamaai]

If the government chooses to strengthen a domestic supply chain, that fits sensible national policy.

[zamaai]

That is quite different from loan guarantees to a single AI firm; targeted industrial support would be beneficial for the country, many industries, and participants across them.

[zamaai]

1. For context: the issue began when a company's CFO suggested the federal government provide a loan guarantee to support AI data center development

[zamaai]

1. Many objected on political-economy and regulatory-capture grounds: a government guarantee would tie a firm's financial health to the public balance sheet and could create incentives for the government to protect that firm against new competitors

[zamaai]

1. Separately, a proposal surfaced for a government insurance backstop for catastrophic AI liabilities, analogous to the federal insurance scheme for nuclear plant meltdowns paired with strict safety rules; there are pros and cons to that idea

[zamaai]

1. In a public-interest comment, the company discussed lowering capital costs for manufacturers in the AI data-center supply chain—similar to supports already provided for semiconductors under the CHIPS Act

[zamaai]

1. Lowering manufacturers' cost of capital is not the same as a loan guarantee. For example, natural gas turbine manufacturers face boom-bust cycles that make investors and lenders cautious, slowing needed supply expansion

[zamaai]

1. One policy option is for the federal government to act as buyer of last resort for future turbines via contracts that guarantee purchases at a defined price if private buyers do not emerge, enabling manufacturers to secure financing at lower rates; many similar schemes are possible

[zamaai]

1. These arrangements expose the government to limited, predefined risk; the political-economy concerns are real but far smaller than those posed by open-ended guarantees of an AI lab's debt

[zamaai]

1. The public comment appears focused on lowering manufacturers' cost of capital rather than seeking guarantees for the company's own debt; the company did not present itself as a manufacturer

[zamaai]

1. Open-ended guarantees of frontier AI lab debt are not supported; targeted industrial policy that (a) limits government exposure to narrow, predefined financial risk and (b) yields tangible, durable assets for the American people (for example, turbines that provide electricity beyond AI) is preferable