Tesla CEO Elon Musk is again sounding the alarm over America’s growing national debt, warning that the United States faces inevitable financial collapse unless artificial intelligence (AI) and robotics dramatically transform the economy.
During a wide-ranging interview with podcaster Dwarkesh Patel, alongside Stripe cofounder and president John Collison, Musk was asked why he pushed for aggressive federal spending cuts while leading the Department of Government Efficiency (DOGE), if emerging technology is expected to supercharge economic growth and ease the debt burden.
Musk said his concern centered on government waste and fraud, even as some reports indicated that broad staffing cuts affected critical personnel who later had to be rehired.
“In the absence of AI and robotics, we’re actually totally screwed because the national debt is piling up like crazy,” he said.
Debt Costs Surging Past Key Federal Spending
Musk noted that interest payments on the roughly $38.5 trillion national debt now total about $1 trillion annually, exceeding current U.S. military spending.
Debt-servicing costs also surpass spending on major social programs such as Medicare.
However, President Donald Trump has pledged to raise annual defense spending to $1.5 trillion, which could temporarily place the defense budget back above interest payments.
Reflecting on his work with DOGE, Musk said he hoped spending restraint could slow the country’s unsustainable fiscal trajectory long enough for technological innovation to accelerate growth.
“It’s the only thing that could solve the national debt,” he predicted.
“We are 1,000% going to go bankrupt as a country, and fail as a country, without AI and robots.
“Nothing else will solve the national debt.
“We just need enough time to build the AI and robots to not go bankrupt before then.”
Technology Boom Could Bring Deflation Risks
Musk has made similar warnings in recent months, including on Nikhil Kamath’s podcast, where he argued that deploying AI and robotics “at very large scale” represents the only viable solution to the debt crisis.
He also cautioned that rapid increases in economic output driven by automation could trigger significant deflation.
“That seems likely because you simply won’t be able to increase the money supply as fast as you increase the output of goods and services,” Musk said.
Deflation would increase the real burden of government debt, while inflation could initially ease that burden before higher bond yields eventually push interest costs upward again.
Structural Advantages, But Mounting Warnings
The United States retains key structural advantages, including the dollar’s status as the world’s reserve currency, which allows the Treasury Department to borrow at comparatively low interest rates.
The federal government’s ability to issue debt in its own currency and the Federal Reserve’s capacity to purchase bonds also reduce the immediate risk of default.
Still, fiscal watchdogs continue to warn about the long-term outlook.
Last month, the Committee for a Responsible Federal Budget (CRFB) said the United States is on a path that could trigger six distinct types of fiscal crises.
While the timing of any crisis is uncertain, the group concluded that “some form of crisis is almost inevitable” without significant policy changes.
Musk’s warning underscores a growing concern among economists, policymakers, and business leaders: without structural reform or a dramatic technological leap, the nation’s debt trajectory may become impossible to sustain.
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