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 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 $9 billion investment in Intel to boost its chip-making efforts, a 15 percent share of NVIDIA and Advanced Micro Devices chip sales to China to help keep China dependent on U.S. 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 were to distressed companies on the verge of collapse whose failure threatened the entire U.S. economy and differ from a stake in the strategically important computer chip 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 companies such as OpenAI, Anthropic, Google, Meta and other leaders in the field would share 5 percent of their valuation with the American public through the U.S. government. Russell Brandom, writing in TechCrunch, explained the ties to the American people:

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 the state of Alaska, distributes a portion of the state’s oil and mineral royalties, which are invested in the Alaska Permanent Fund. The yearly payout varies 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 concept as it might be applied to the AI economy harks back to Sam Altman and others who had in the past suggested that AI corporations’ 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:

This raises economic, social and political questions that impact higher education and American culture broadly. If, as has been predicted, we see 10 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, health care and other benefits that are needed 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.