On Wednesday, October 21, U.S. Treasury Secretary Bessent said at a closed-door meeting of Wall Street elites in New York that he does not believe there is a "systemic problem" in the AI industry, and he rejected comparisons between the current AI boom and the internet bubble.
Bessent spoke to hundreds of financial executives and investors. The event was co-hosted by JPMorgan Chase and the nonprofit organization Robin Hood, with tickets starting at $7,500, and it was not open to the media.
According to three attendees who spoke to the Financial Times, Bessent said in an interview with Bridgewater CEO Nir Bar Dea: "I'm good at judging when there's a problem in the system." "I don't see a systemic problem."
Bessent also clearly rejected the AI bubble theory. He further said: "The smartest people in the world — 99% of their net worth is bet on these companies, and they have already built the most profitable enterprises in the world — they believe in this."
Bessent's remarks came against the backdrop of recent continued market volatility. Some investors are questioning whether the rally in AI stocks has gone too far, and they are worried about the huge debt being issued to finance data centers and chips.
Bessent also shared his views on the overall state of the U.S. economy, with the latter part of the conversation focused mainly on AI. He was generally optimistic about the benefits this cutting-edge technology will bring to the United States, but he also pointed out that data center and AI companies have not done a good enough job of communicating this message to ordinary Americans.
Closed-door meeting sparks transparency controversy
The event was co-hosted by JPMorgan Chase and the Robin Hood Foundation. Robin Hood was founded by billionaire hedge fund manager Paul Tudor Jones and focuses on poverty alleviation. Tickets started at $7,500, with the highest sponsorship package reaching $100,000. This year marked the 14th edition, with nearly $72 million raised in total. Other speakers included macro investor Stanley Druckenmiller and hedge fund manager Steve Cohen.
The event was not open to the media. In response to the Financial Times, a Treasury spokesperson used firm language, saying: "Bessent has 35 years of experience in both the public and private sides of the financial industry and knows well what constitutes material nonpublic information. Everything he said at the event had been expressed publicly before."
The spokesperson also added: "The media has become so inaccurate that he can no longer read the newspapers."
Robin Hood Chief Communications Officer Kevin Thompson said the event has been a private forum not open to reporters for most of its history, and it has invited many current and former government advisers and cabinet members.
Former Treasury secretary: I always made sure the media was present
The matter has raised outside questions about the transparency of the Treasury secretary meeting market participants behind closed doors.
Former U.S. Treasury Secretary Yellen said in a media interview: "When I give remarks, I always make sure the media is present." She noted that her background as a former Federal Reserve chair has made her highly alert to the risks of conveying sensitive information to a limited group of market participants.
The Federal Reserve requires officials to ensure that their engagement with the public "does not give any for-profit individual or institution an advantage over competitors," and it recommends that Federal Open Market Committee officials speak at events where the media is present.
However, there is currently no rule restricting the Treasury secretary from speaking to a large group of private market participants without reporters present.
Mike Davis, founder of the conservative legal nonprofit Article III Project, defended the event, saying: "This is not an investor meeting, but a charitable event. We should encourage government officials to attend such events."
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