Elon Musk‘s bet that artificial intelligence can rescue America’s finances is facing an early test, and the numbers are moving the wrong way.
In a podcast interview in Nov, 2025, Musk said AI and robotics were “pretty much the only thing” that could solve the U.S. debt crisis.
“I think that’s pretty much the only thing that’s going to solve for the U.S. debt crisis, because currently the U.S. debt is insanely high,” Musk said.
At the time, the debt stood at more than $38 trillion. It crossed $40 trillion in August, 2026.
What Musk predicted
Musk called the debt “insanely high,” pointing out that interest payments alone exceeded the entire U.S. military budget.
He argued that AI would eventually push the output of goods and services past growth in the money supply, likely causing “deflation”.
Elon Musk, chief executive officer of Space Exploration Technologies Corp. (SpaceX), speaks at the unveiling of the Manned Dragon V2 Space Taxi in Hawthorne, California, U.S., on Thursday, May 29, 2014.Getty Images
His timeline was three years. He admitted, however, that AI had not yet lifted productivity enough to get there.
The pressure has only grown since. The 10-year Treasury yield climbed to 5.24% in late September, while the 30-year yield hit 5.56%, its highest level since June 2004.
Economists say AI won’t be enough
A study from the Brookings Institution from July found that AI-driven growth could shrink deficits but is unlikely to close the gap, even in optimistic scenarios.
The authors warned that AI could also raise government costs. People may live longer and draw more Social Security, job losses could increase demand for income support, and defense spending may rise.
They found these effects could cancel out half to two-thirds of AI’s benefit to the budget.
Meanwhile, Treasury Secretary Scott Bessent offered a different path. He has said 3% GDP growth, combined with spending restraint, could help the U.S. grow its way out of its debt. Not all economists agree, with some calling the idea unrealistic.
Most Popular on TheStreet Roundtable: Why Bitcoin holders see a different fix
Musk has also flagged a catch in his own plan. Musk has said that if AI and robots increase output, the government must issue dollars to people or face “massive disinflation.”
But printing more dollars risks weakening the currency. That is where Bitcoin supporters see an opening, since its supply is capped at 21 million coins.
SkyBridge Capital founder Anthony Scaramucci is among them. In August, he agreed with Peter Schiff’s warnings about U.S. debt and inflation, but said his answer was Bitcoin, not gold.
Musk himself has had a mixed relationship with Bitcoin. In 2021, he called himself “a supporter of Bitcoin.”
Months later, Tesla stopped accepting it as payment over environmental concerns, and it sold most of its holdings in 2022.
Still, Tesla holds 11,509 Bitcoin, while SpaceX disclosed 18,712 Bitcoin in its IPO filing.
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This story was originally published by TheStreet on Oct 14, 2026, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.