If the AI bubble bursts, the consequences could extend far beyond Silicon Valley’s boardrooms and venture capital portfolios. While many may dismiss the risk as a distant concern for tech entrepreneurs and wealthy investors, the fallout could ultimately land on the shoulders of ordinary taxpayers. AI development has already attracted massive public and private investment, with governments around the world pouring billions into national AI initiatives, research grants, and infrastructure. In the United States alone, federal funding for AI research has surged in recent years, driven by strategic competition with China and promises of economic transformation. Much of this funding comes from taxpayer dollars, often justified by claims of long-term innovation and national security benefits. When startups and AI labs fail—either due to overvaluation, technological dead ends, or lack of sustainable business models—the financial losses are not always confined to private investors. Public funds can be tied up in failed projects, and government-backed research may yield little return. In some cases, taxpayer money has already been used to subsidize AI startups through grants, contracts, and infrastructure support. Moreover, if a major AI company collapses, it could trigger a chain reaction in the broader economy. Jobs could be lost, supply chains disrupted, and financial markets shaken. The fallout could strain public safety nets, especially if workers in the tech sector face sudden unemployment. There’s also the risk of regulatory backlash. If the collapse is tied to reckless spending or misleading claims about AI’s capabilities, lawmakers may respond with sweeping new regulations—potentially stifling innovation or forcing governments to bail out failing ventures. The danger isn’t just economic—it’s also ethical and societal. If AI systems are deployed based on inflated promises and then fail, public trust in technology could erode. That could undermine future adoption of AI in critical areas like healthcare, education, and climate modeling. While the current AI boom is driven by private capital, the public is already deeply entangled through funding, policy, and infrastructure. A burst bubble wouldn’t just be a Silicon Valley problem—it could become a national one, with taxpayers footing the bill for the excesses of the tech industry.