LEFT-LEANING US Senator Bernie Sanders and Republican President Donald Trump have found surprising common ground: the US government should take stakes in AI companies so the public can share in the rewards. With nationalisation back in vogue, turning AI firms into quasi-utilities may no longer be a pipe dream.
As investors get giddy about upcoming public share sales by the AI boom’s leading names, OpenAI and Anthropic, there’s more than a little anxiety about how government copes with potentially seismic changes to the economy and society from rapid automation of both white- and blue-collar jobs.
In a New York Times op-ed last Monday, Sanders advocated the government taking 50% stakes in the big AI companies.
The Vermont independent senator said he plans to introduce legislation creating a sovereign wealth fund to hold those stakes.
He said the fund would give the public a role in determining the future of the technology and secure some of the trillions of dollars of profits for the workers most affected by it.
In times past, that idea might have ended up as a trial balloon by a firebrand politician, calculated to excite debate and little else as private enterprise and free-market thinking drowned it out.
Except Trump, and possibly even the bosses of one of the AI companies, may be thinking along the same lines.
Digital news outlet Notus reported last Thursday that senior US officials held preliminary discussions with major AI companies about the government possibly buying shares in their firms.
The talks, which included OpenAI CEO Sam Altman, centred on having the firms voluntarily cede shares to the government.
Returns on investment could then be directed to public purposes and possibly even dividends to American households, the report said.
By Friday, Trump seemed on board with that plan. “There’s something very interesting about it, where it almost becomes a partnership with the American public,” he told reporters aboard Air Force One. “We’ll look into that.”
On the specifics of the Sanders idea, he was also quoted as saying he has been considering government investment in AI companies for over a year. “Where economics are concerned, we (Trump and Sanders) have things that aren’t that far apart.”
And if you thought that was all feel-good bluster, the tactic is already a reality for an administration pushing an unusually large role in the corporate sector. It took a 10% stake in US chipmaker Intel last year, stakes in a handful of rare-earth firms and then quantum computing companies, including IBM, only last month.
Whether any of this fits into Trump’s executive order last year on creating a sovereign fund to house these investments is not yet clear. But the prospect of AI stakes is far from fanciful now.
Whether that should encourage prospective shareholders or spook them is an open question.
The government stake has not done Intel’s stock any harm. Since the 10% stake was taken last August, Intel has quintupled in value, transforming Washington’s US$10 billion (RM41 billion) investment into one worth US$50 billion.
Some may argue that a government stake makes these companies too big to fail and underscores their success.
Others will see the opposite risk: that state ownership deters private capital, politicises AI governance and leaves taxpayers exposed if public investments underperform.
But questions remain about how a government shareholder might exert its influence, either as a significant minority investor or by expanding its stake over time to wield greater control.
Only last month, Trump told Fortune magazine that he “should have asked for more” from Intel.
The Sanders plan sets an ambition. If AI and quantum computing firms are considered vital to national economic and military security, might they not eventually be seen as state-run utilities? As both Sanders and OpenAI’s Altman insist, AI is a summation of collective human experience.
“Artificial intelligence (AI)was not created out of thin air. The data and language used by generative AI tools didn’t just pop into Sam Altman’s head or Elon Musk’s imagination,” wrote Sanders. “AI is built on our collective intelligence: our books, songs, artwork, journalism, computer code, scientific research, videos, conversations, images and ideas spanning generations.”
But in a post-pandemic world of greater rivalry, supply chain anxieties, trade tensions and national security concerns, government control of strategic industries has become much more compelling. AI and quantum computing are increasingly being viewed as critical national resources that need protection and investment.
Cornell Professor Nicholas Mulder argues we are in the fourth wave of nationalisations in a century. This wave has seen governments take half a trillion dollars in assets worldwide since 2020 – the first such surge since the 1970s.
Beyond America’s borders, the push for governments to take stakes in fast-moving tech firms may turn panicky, forcing catch-up investment in regional tech ecosystems that would not be necessary in more globalised times.
Former IMF chief economist Ken Rogoff wrote last week that governments that fail to secure a place in the AI supply chain may find themselves confronting mass job displacement without the tax revenues or state capacity needed to contain the social and political fallout.
“No one really knows what such a world would look like, let alone how to keep it from tearing itself apart,” he warned.
That uncertainty may be enough to push governments from regulating AI to owning a piece of it.
This article is contributed by Mike Dolan, a columnist for Reuters.