Musk Warns: US Faces '1000% Bankruptcy' Without AI

2026-02-09 economy

Washington, Monday, 9 February 2026.
Elon Musk stated on February 5th, 2026, that the US could face total bankruptcy if AI and robotics are not rapidly developed to offset the $38.5 trillion national debt. Interest payments alone approach $1 trillion annually.

The Core of Musk’s Argument

Musk’s warning, reiterated on February 8th, 2026, emphasizes that without significant advancements in AI and robotics, the United States is at a ‘1000% going to go bankrupt’ [4][8]. He views these technologies as the primary solution to the escalating national debt, which currently exceeds $38.5 trillion [1][4]. Musk believes that the deployment of AI and robotics on a large scale is the only viable path to resolving the U.S. debt crisis [5].

Economic Implications and Counterpoints

The Committee for a Responsible Federal Budget (CRFB) issued a warning in January 2026, stating that the U.S. is on a course that could lead to multiple fiscal crises if current trends are not corrected [1]. The CRFB projects that annual interest spending could rise to $1.5 trillion by 2032 and potentially reach $1.8 trillion by 2035 [4]. However, not all experts agree with Musk’s dire prediction; Ray Dalio, founder of Bridgewater Associates, suggests that while the U.S. is heading towards a ‘debt death spiral,’ the central bank is likely to intervene by printing money and buying bonds, which would lead to currency depreciation rather than outright bankruptcy [4][5].

Potential for Deflation and Universal Basic Income

Musk has also cautioned that the increased productivity resulting from AI and robotics could lead to deflation, where the money supply cannot keep pace with the output of goods and services [1][4]. To mitigate potential employment crises caused by mass automation, Musk has suggested a ‘universal high income,’ a variant of Universal Basic Income (UBI) [7]. Pilot tests of UBI have shown positive results regarding mental and physical well-being without disrupting basic economic functions, offering a potential solution to the societal changes brought about by widespread AI and robotics adoption [7].

Musk’s Initiatives and the Path Forward

Musk has actively engaged in efforts to address government spending and efficiency, including advocating for cuts under the ‘Department of Government Efficiency’ (DOGE) framework [4]. Although D.O.G.E. aimed to cut $2 trillion in government spending, reports from December 2025 indicate that it may have only saved between $61 billion and $214 billion [7]. Despite these efforts, Musk remains firm in his belief that without AI and robotics, the U.S. is ‘truly doomed’ due to the alarming rate at which U.S. Treasury debt is increasing [5].

Sources

artificial intelligence national debt