Markets: Musk Warns Without AI and Robotics, U.S. Heads Toward Default Amid 38.5 Trillion Debt (2/8/2026)

Tesla Executive Chairman Elon Musk warned in a recent podcast that without large-scale deployment of AI and robotics, the U.S. is teetering toward default on its $38.5 trillion debt. Last month’s interest payments alone exceed $1 trillion, surpassing the federal budget for Medicare and other social programs. He argued that wastefulness and fraud within government exacerbate the debt burden, and that AI and robotics are the only solutions to generate growth and purchasing power sufficient to service the debt. However, he cautioned such growth could also trigger deflation. While Bridgewater Associates’ Ray Dalio sees a “debt death spiral” with central banks likely printing money to buy bonds, Musk warned the trajectory could make the U.S. dollar rapidly worthless. Purchasing power has eroded to about 12.06 cents per dollar since 1970, according to the Minneapolis Fed.