White House National Economic Council Director Hassett responds to AI stock sell-off: the industry has ample cash, and there is no risk of a broad sell-off

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Cailianshe Huang Junzhi, Editor Xu Xiang 2026-11-03 09:23

①Hassett acknowledged that some companies may be carrying massive debt, and this phenomenon is indeed worthy of attention; ②He also pointed out that there are many financially strong companies in the industry that hold both equity and debt in the relevant companies; if a company runs into trouble, these companies can step in to acquire it or provide funding support.

Cailianshe, November 3 (Editor Huang Junzhi) — Kevin Hassett, director of the White House National Economic Council, responded on Monday in a latest interview to the recent plunge in tech stocks. He made clear that this adjustment does not mean the artificial intelligence (AI) industry faces a risk of a full-scale sell-off, and stressed that capital within the industry ecosystem remains abundant.

Hassett acknowledged that some companies may be carrying massive debt, and this phenomenon is indeed worthy of attention. But he also pointed out that there are many financially strong companies in the industry that hold both equity and debt in the relevant companies; if a company runs into trouble, these companies can step in to acquire it or provide funding support.

"There is plenty of cash in this ecosystem, and I think people should feel reassured by that," Hassett said. He added that after the previous strong rally, the market sometimes does need a certain pullback, but he believes there is absolutely no risk of a full-scale sell-off.

Hassett's remarks came as the artificial intelligence (AI) trade is undergoing a new round of adjustment. Last week, the tech stock sell-off intensified, with both Google and Intel's guidance falling short of expectations, further weakening investors' confidence in the returns on AI infrastructure investment.

Market concerns about the AI industry have gradually shifted from whether companies can sustain rapid growth to whether massive capital expenditures can translate into sufficient revenue and cash flow. Although the latest earnings reports from major AI builders show cloud computing businesses continue to grow strongly, investors' attention is turning to data center construction costs and the pressure these investments place on companies' free cash flow. As capital expenditures continue to climb, the market's return requirements for large tech companies are also rising.

Previously released earnings reports show that Alphabet, Amazon and Meta all further increased their AI-related investment plans. At the same time, some companies face significant pressure on free cash flow, prompting investors to question the source of funding for their continued expansion.

Pressure in the AI infrastructure financing market is also increasingly evident. Yields on some bonds and loans used for data centers and chip manufacturing have risen to double digits, and it is becoming increasingly difficult for banks to transfer related financing risks to insurers and other investors. The market is particularly focused on specialized AI computing service providers known as "neoclouds," which typically require huge upfront investment to build computing facilities and then gradually recoup costs by renting out computing power.

According to media reports, AI industry financing is increasingly reliant on debt, with AI-related debt issuance expected to exceed $600 billion by 2026, roughly 10 times the level in 2024. As global interest rates rise, the cost of capital is becoming an unavoidable constraint on AI infrastructure investment.

Hassett's optimistic remarks stand in sharp contrast to the actual pressure in the financing market. On the one hand, the White House is trying to play down market worries about an AI bubble and emphasize that the industry has ample internal capital and self-repair capacity. On the other hand, the rapid expansion of debt and rising yields reflect investors' growing doubts about the return cycle of AI infrastructure.

Analysts point out that for market participants, the key question is whether, as the cost of capital continues to rise, AI companies reliant on debt expansion can maintain cash flow balance, and whether, as Hassett said, financially strong companies will really step in to take on risk when necessary.

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Cailianshe Disclaimer: The content of this article is for reference only and does not constitute investment advice. Investors who act on it do so at their own risk.

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