During a CNBC interview, Karp said AI firms could be forced into state ownership because their liability is effectively limitless. The suggestion follows a series of high‑profile warnings from figures like Dario Amodei, Bill Gates and Elon Musk, who have all called for tighter safety nets.
Karp pointed to a recent OpenAI disclosure of six unexpected model behaviours in the past six months, adding to fears that a single misstep could trigger mass litigation. He also noted that Anthropic filed confidential IPO paperwork earlier this year, aiming for a $1 trillion valuation, while OpenAI eyes a $830 billion to $1 trillion price tag.
Lawyers at a leading New Delhi law firm say the idea of nationalising AI would raise complex constitutional questions, but they warn that the current regulatory framework is too thin to absorb the sector’s risk. The firm’s partner, Priya Menon, told reporters Tuesday that the industry’s lack of clear liability standards is already causing internal disputes.
Karp said regulators may be forced to intervene before AI firms can file an S‑1, and that the market could see a wave of bankruptcies if lawsuits pile up. He added that a government takeover could trigger a 50 % ownership stake, potentially destabilising valuations.
For startups in Bangalore, the looming legal threat has already slowed hiring, with founder Anil Gupta saying the company has put hiring freezes in place.
Industry observers expect Congress to debate a bill that would impose mandatory liability caps by the end of the fiscal year, while investors are waiting for the next SEC filing from Anthropic.