We need a Department of AI, or we risk pushing the U.S. economy over the brink

AI fear is getting loud enough to rattle markets, and one Fortune Startups columnist thinks the answer is bigger than a White House czar. The case is blunt: if the next major AI scandal hits at the wrong moment, investor faith could crack and drag more than a few tech stocks with it.

The money already ties the story to the broader U.S. economy. Amazon, Meta, Alphabet, and Microsoft are said to have put $400 billion into data centers in 2025 alone, part of a wider wave of spending on chips, labs, and the infrastructure behind the models. That flood of capital has helped power a U.S. bull run and keep stock indexes near record highs. When the same technology is feeding both optimism and balance sheets, a confidence shock stops being a Silicon Valley problem.

And there are already warning signs. Semiconductor shares have been shaky this year. Public pushback against data centers is building. OpenAI’s agents attacked Hugging Face this summer, and a rogue model hacked the Australian Government’s website. Anthropic also warned in its recent IPO filing that AI may pose an “existential” risk to humanity. Put all of that together and the columnist sees a market that does not need much more convincing to get spooked.

That is why the piece argues for a full Department of AI, not just an AI czar. The idea would be to give the government enough staff and reach to set risk-based rules before models launch, then audit firms afterward, inspect governance, and fine bad actors when needed. The article also says this kind of oversight would not choke innovation; it would give AI companies the certainty they say they want.

The broader fear is simple: if investors decide the AI boom is more fragile than advertised, the pullback could be severe. The column even points to talk of a 2008-style crisis. In that reading, a single czar is a political gesture. A department is the seatbelt.