The US national debt has crossed $40 trillion, nearly a year after Musk argued that artificial intelligence and robotics could help the country overcome its mounting fiscal burden.
Elon Musk's vision of artificial intelligence and robotics as a way out of America's debt crisis is facing a test as the country's national debt reaches $40 trillion, raising questions about whether technology-driven growth can keep pace with the government's mounting financial obligations.
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In November 2025, Musk argued that AI and robotics offered perhaps the only viable path to resolving the crisis, pointing to the sheer scale of US borrowing and the rising cost of interest payments.
At the time, the national debt had exceeded $38 trillion. It crossed the $40 trillion mark in August 2026, according to a report by TheStreet published on October 14.
Musk's thesis hinges on a sweeping technological transformation: that breakthroughs in artificial intelligence and robotics will unleash a surge in productivity, dramatically expand economic output and help relieve the crushing pressure of America's public debt.
But whether such a profound shift can materialise within the three-year window he envisaged remains an open question, with the promise of an automated economic boom still far from proven.
How AI Could Help Reduce US Debt
Musk argues that AI-led automation could drive a surge in output, pushing the supply of goods and services ahead of money growth and triggering deflation.
The resulting productivity gains could spur economic expansion, boost tax revenues and help curb America's widening budget deficit and debt burden.
However, America's debt burden remains formidable, with interest payments alone surpassing the country's defence budget, a concern Musk has previously underscored.
The yield on 10-year US Treasury bonds rose to 5.24% in late September, while the 30-year yield touched 5.56%, its highest level since June 2004, TheStreet reported.
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Economists Warn AI May Not Be Enough
Contrary to Musk's optimism, a Brookings Institution study found that AI-led growth may ease but not eliminate US budget deficits, as higher Social Security payments, job-loss support and defence spending could erode much of the fiscal gains.
According to the study, these additional costs could offset between half and two-thirds of the potential budgetary benefits from AI-driven growth.
US Treasury Secretary Scott Bessent has outlined a different approach, arguing that economic growth of 3%, combined with spending restraint, could help the country manage its debt burden.
However, the strategy has also faced scepticism from economists who question whether sustained growth at that level would be sufficient.
Why Bitcoin Has Entered The Debate
Musk has warned that an AI-driven surge in production could force governments to put more money into people's hands to avert severe disinflation.
Critics of monetary expansion fear it could weaken the dollar, while Bitcoin advocates point to the cryptocurrency's hard cap of 21 million coins as a hedge against currency debasement.
SkyBridge Capital founder Anthony Scaramucci has advocated Bitcoin as an alternative to gold in discussions about US debt and inflation.
Musk, meanwhile, has had a mixed relationship with cryptocurrency.
Tesla stopped accepting Bitcoin payments in 2021 over environmental concerns and sold most of its holdings in 2022.
However, Tesla still holds 11,509 Bitcoin, while SpaceX disclosed holdings of 18,712 Bitcoin in its initial public offering filing, according to TheStreet.
For now, Musk's vision remains a long-term proposition. AI could improve productivity and support economic growth, but whether those gains can outpace government spending, interest costs and rising fiscal obligations remains an open question.
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