The AI industry is pursuing a Hamilton-style strategy of converting commercial vulnerability into political protection by aligning its survival with national security and recruiting public capital through massive IPOs.

Persistent losses, enormous infrastructure commitments and heavy insider selling indicate that leading AI firms remain far from sustainable profitability while shifting speculative risk onto retail investors and, potentially, taxpayers via federal-backed projects such as Stargate.

The resulting arrangement risks a concentrated financial shock once market discipline reasserts itself, with the costs falling primarily on ordinary investors rather than the early private and institutional beneficiaries.

The genius of his 1790 debt assumption was not fiscal, it was psychological. When he forced the federal government to absorb the states’ war obligations at par, speculators who had bought Revolutionary War certificates at ten cents on the dollar suddenly held federal bonds worth face value. They had not bought America out of patriotism. They had a position in it. And men with positions become lobbyists, become power brokers, become the most passionate voices in any room insisting that the state cannot be permitted to fail—because their net worth is now coterminous with its survival. Jefferson called this arrangement a “corrupt squadron.” He was right. Hamilton won anyway, and the corrupt squadron governed American finance for forty years.

The artificial intelligence lobby did not read Hamilton’s papers. It arrived at the same design through sheer commercial necessity. When you cannot survive market discipline, you buy political immunity instead. This is not a scandal, it is a strategy—the oldest and most durable in the history of American capital. The novelty in 2026 is the scale at which it is being executed, and the efficiency with which ordinary investors are being recruited to underwrite the exit.

The Baptists and the Bootleggers

To understand the mechanics of this maneuver, one must look to the classic economic theory of “Baptists and Bootleggers.” Coined by economist Bruce Yandle, the model explains how durable regulations are rarely passed by one group alone; they require an unspoken, parallel partnership. The “Baptists” provide the moral, public-facing crusade (such as banning Sunday alcohol sales to preserve the Sabbath), while the “Bootleggers” quietly reap the financial windfalls of the resulting market restrictions (such as monopolizing illegal Sunday sales). Both lobby for the exact same law, but while one seeks virtue, the other seeks rent.

Sam Altman’s regulatory pivot between 2023 and 2025 is a masterclass in this dynamic. In 2023, he appeared before Congress performing existential dread—genuinely afraid, he insisted, of the........

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