Treasury Secretary Bessent rejects AI liability shield demands

Treasury takes firm stance on AI accountability

Treasury Secretary Scott Bessent delivered a clear message to artificial intelligence developers on Monday: don't count on the federal government to shield you from legal liability.

Speaking on CNBC's "Squawk Box," Bessent rejected a key industry demand, stating that "it is humans who are responsible, not the AI." He emphasized that AI companies "need to take responsibility for themselves" rather than seeking federal protection from legal consequences.

The comments represent a significant pushback against lobbying efforts by some AI firms seeking liability protections as they deploy increasingly powerful models. While Bessent's remarks align with President Donald Trump's opposition to heavy-handed regulation that could slow AI development in the United States, they draw a line on absolving companies of legal responsibility.

Why it matters

The liability question sits at the heart of AI governance debates. As AI systems make consequential decisions in healthcare, finance, and other sectors, determining who bears legal responsibility when things go wrong has major implications for innovation, consumer protection, and corporate risk management. Bessent's position suggests the Treasury Department will not support legislative carve-outs that would limit companies' exposure to lawsuits or regulatory penalties.

Broader economic agenda

Bessent's Monday appearance covered multiple fronts beyond artificial intelligence. He discussed weekend meetings with Chinese Vice Premier He Lifeng ahead of a scheduled summit between Trump and Chinese President Xi Jinping later this week.

The Treasury Secretary also defended the department's bond buyback program amid criticism from House Democrats over rising yields. The 10-year Treasury yield climbed above 5% last week for the first time since 2007, representing a roughly 100 basis point increase since late February when U.S.-Israel-Iran hostilities escalated. Home loan rates have risen above 7% this month.

At a House Financial Services Committee hearing on September 15, Bessent characterized the Treasury's September 10 purchase of more than $5 billion in 10-year and 20-year securities as "successful," arguing the operation prevented yields from climbing even higher. He maintained that counterfactual defense in his Monday remarks.

The Federal Reserve's Federal Open Market Committee voted September 16 to raise its benchmark rate to a range of 3.75% to 4%—the first increase since 2023—as policymakers responded to what they termed "elevated inflation." Trump has publicly called for rate cuts but reportedly told Fed Chairman Kevin Warsh to "vote with the board" before the meeting.

These details were first reported by Quartz.