Union Urges Treasury to Address AI Bubble Risks to Worker Pensions

WASHINGTON—In a recent development, Randi Weingarten, President of the American Federation of Teachers (AFT), has dispatched a letter to Treasury Secretary Scott Bessent. Bessent, who leads the Financial Stability Oversight Council (FSOC), has been urged to initiate an investigation into the burgeoning financial risks associated with the rapid expansion of the artificial intelligence sector. The appeal highlights significant threats to the retirement security of AFT’s 1.875 million members and the broader U.S. economy.

The AFT oversees pensions and retirement funds amounting to over $4 trillion, which include investments in AI-related companies. Concerns over these investments were initially raised by members of the AFT Trustee Council.

“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 coincides with Bessent’s testimony before the House Financial Services Committee regarding the international financial system. Simultaneously, Weingarten is set to confer with AFT Trustee Council members on warnings from AI industry leaders about the sector’s direction. Meanwhile, President Trump has dismissed calls to decelerate AI development.

Weingarten's letter urges Bessent and FSOC’s leaders to publicly disclose risks tied to inflated AI stock valuations, discrepancies between AI investment and income, off-balance-sheet debts, dubious accounting, and interdependencies among financial entities. She emphasizes the necessity of avoiding a repeat of the 2008 financial crisis and opposes any taxpayer-funded bailout for AI firms.

This stance from AFT follows a November 2025 note from 22 House Financial Services Committee members and a January 2026 letter from Senators Elizabeth Warren, Richard Blumenthal, Chris Van Hollen, and Tina Smith, advocating for an AI task force.

"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’s current strategy has been to reduce FSOC’s crisis-prevention capabilities, despite warnings from former International Monetary Fund economists about a potential $20 trillion loss from a collapse in AI equities—surpassing the 2008 financial crisis by $3 trillion.

In response, Warren and Blumenthal introduced the AI Bubble Transparency Act in June 2026, aimed at mandating FSOC to collect comprehensive data on the AI sector. However, this legislation has yet to progress.

“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.