What if the U.S. Government Owned Stock in AI Companies?
OpenAI CEO Sam Altman has floated the idea that the United States Government should become a stockholder in Artificial Intelligence (AI) companies. Yes, actually own shares of the thriving major AI companies!
Of course, it is not without precedent that the feds assume partial ownership of private companies. Benjamin D. Connard of Carnegie Investments reports that recent federal holdings have included the nearly nine billion dollar investment in Intel to boost their chip-making efforts; 15% share of NVIDIA and Advanced Micro Devices chip sales to China to help keep China dependent on US technologies; and the Pentagon’s $400 million equity stake in MP Materials, a rare-earth miner. These recent investments differ from the massive auto industry and bank bailouts in the past. Those prior bailouts were to distressed companies on the verge of collapse, whose failure threatened the entire U.S. economy and differ to the stake in the strategically important computer chip market and rare-earth resource sectors. The move suggested by Altman in the contemporary technology market could build a national AI investment vehicle or sovereign wealth fund. That is new and would take congressional action.
Altman’s concept is that shares of such companies as OpenAI, Anthropic, Google, Meta and other leaders in the field would share 5% of their valuation with the American public through the US Government. Russell Brandom, writing in TechCrunch explained the ties to the American people:
Most recently, a policy paper titled “Industrial Policy for the Intelligence Age,” released by OpenAI in April, proposed a public wealth fund that could invest directly in AI labs and companies deploying their technology. “Returns from the Fund could be distributed directly to citizens, allowing more people to participate directly in the upside of AI-driven growth, regardless of their starting wealth or access to capital,” the document reads. A more aggressive version of the policy was proposed by Sen. Bernie Sanders (I-VT) in June, calling for a one-time 50% tax on AI company stock, with the collected shares being deposited into a public wealth fund. The bill, called the American AI Sovereign Wealth Fund Act, would apply to all “systemically important” AI companies, including those dealing with data centers, infrastructure, or robotics. Under the proposal, companies like Google and SpaceX that include AI as only part of their business would be allowed to spin off non-AI portions of the company to avoid taxation.
The background on this move is key to understanding how the federal government might be able to respond to the widely predicted AI-induced job shakeout expected to come in the next five years. The concern is growing as we approach 2030 that tens of millions of Americans will be impacted by job losses or pay reductions due to businesses employing AI for efficiency reasons to replace human workers. The question is how can one find a way to extract funds from those who stand to make billions of dollars in providing AI substitutions for the workers who stand to lose their jobs?
Reportedly, Altman’s latest proposal is loosely based on the Alaska Permanent Fund Dividend. That fund, unique to Alaska, distributes a portion of the state’s oil and mineral royalties, which are invested in the Alaska Permanent Fund. The yearly payout ranges depending on the fund’s investment performance. As Wikipedia describes it, “The PFD is a basic income in the form of a resource dividend. Some researchers argue, ‘It has helped Alaska attain the highest economic equality of any state in the United States… And, seemingly unnoticed, it has provided unconditional cash assistance to needy Alaskans at a time when most states have scaled back aid and increased conditionality.’”
A similar “universal basic income” (UBI) concept as it might be applied to the AI economy hearkens back to Sam Altman and others who had in the past suggested that AI corporation profits could become a primary source of revenue sharing to supplement all residents’ income. Basic annual income (often called base salary or base pay) is a fixed amount of money that residents or citizens might receive in a 12-month period before any taxes, benefits, or deductions are applied. It excludes variable compensation such as overtime, bonuses, or commissions.
Matt Wolfe who blogs and curates AI news, expert commentary, top tools, and exclusive interviews weekly, in Future Tools describes his uneasy reaction to Altman’s proposal:
OpenAI just floated an idea that sounds great in theory but has me a little uneasy in practice. According to a Financial Times report, OpenAI has proposed giving the US government a 5% ownership stake in the company worth roughly $42.6 billion based on OpenAI’s most recent $852 billion valuation. Sam Altman’s pitch is that if AI creates massive economic upside, the public should share in it, modeled loosely on the Alaska Permanent Fund (where the state’s oil revenue gets invested and pays annual dividends to every resident). Altman also wants other major AI labs—Anthropic, Google, Meta, xAI—to each contribute a similar 5% stake to the same public wealth fund. A few context points that matter here: This isn’t happening in a vacuum. The government has been ramping up pressure on AI companies for months.
This raises economic, social and political questions that impact higher education and broadly American culture. If, as has been predicted, we see ten million or more jobs lost due to AI by the year 2030, we soon will be in dire need of a solution to backstop the salary, healthcare, and other benefits that will be assumed by the individuals and families impacted by job loss. Is this a viable way to begin to fill the gap? Does it make sense to ask the companies that develop and market the AI technologies that result in massive job losses to shoulder the loss to the masses who will be affected?
Has this been the subject of discussions on your campus? If this kind of solution were implemented, that would solve only one part of the problem, backfilling lost salaries and benefits, while neglecting other parts of the problem, such as the need to educate and train workers for full employment in the American economy. By solving the shortfall for those who are unemployed, do we run the risk of significantly diminishing the full marketplace for college graduates and certificate holders? What, then, are the implications for higher education?
Should you consider engaging or leading discussions on these questions at your institution? The implications are many. The answers to these questions may determine the future of your university and your employment.
This column was originally published in Inside Higher Ed.
Ray Schroeder is Professor Emeritus, Associate Vice Chancellor for Online Learning at the University of Illinois Springfield (UIS) and Senior Fellow at UPCEA. Each year, Ray publishes and presents nationally on emerging topics in online and technology-enhanced learning. Ray’s social media publications daily reach more than 12,000 professionals. He is the inaugural recipient of the A. Frank Mayadas Online Leadership Award, recipient of the University of Illinois Distinguished Service Award, the United States Distance Learning Association Hall of Fame Award, and the American Journal of Distance Education/University of Wisconsin Wedemeyer Excellence in Distance Education Award 2016.
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