{"slug": "why-state-owned-ai-wont-solve-inequality", "title": "Why state-owned AI won’t solve inequality", "summary": "A government stake in AI companies, as proposed by President Donald Trump and Senator Bernie Sanders, would not solve inequality and could create conflicts of interest, according to critics. Former presidential candidate Michael Bloomberg called the idea \"dangerous,\" warning that politics would trump profits and regulation would be corrupted. The U.S. has no federal AI laws, and owning minority stakes could reduce incentives for safety, antitrust, and content regulation.", "body_md": "Last month, U.S. President Donald Trump [suggested](https://www.reuters.com/business/media-telecom/trump-says-he-thinks-ai-companies-will-agree-giving-back-public-2026-06-10/) the government buy equity in AI companies, in response to concerns that the industry’s boom is leaving most Americans behind. His political opposite, Senator Bernie Sanders, had earlier [proposed](https://www.nytimes.com/2026/06/01/opinion/artificial-intelligence-bernie-sanders.html) creating a sovereign wealth fund with up to a 50% stake in AI companies, and OpenAI is [reported](https://www.ft.com/content/7c803eab-8e80-4431-9a87-e943bf00e00b) to be in talks to give the U.S. government a 5% stake as it prepares for an IPO. But is a government stake in AI companies necessary? And is it wise?\n\nA government owning equity in a company is not a new concept. In many countries, the government owns stakes in companies seen as critical to the economy or to national security. These may include oil and gas companies, iron and steel manufacturers, banks, telecom firms, aircraft makers, ship builders, and others.\n\nThe U.S. has a precedent in the Alaska Permanent Fund, which pays dividends to citizens from the state’s oil wealth. In the past year, the Trump administration has made deals to buy equity stakes in more than two dozen firms across industries, including[ semiconductors](https://www.intc.com/news-events/press-releases/detail/1748/intel-and-trump-administration-reach-historic-agreement-to), nuclear energy, minerals,[ quantum computers](https://www.nytimes.com/2026/05/21/business/trump-quantum-computers-stake.html), and steel. [OpenAI](https://cdn.openai.com/pdf/561e7512-253e-424b-9734-ef4098440601/Industrial%20Policy%20for%20the%20Intelligence%20Age.pdf) and Anthropic have both proposed a public or sovereign wealth fund to distribute wealth created by AI among the public.\n\nBut the developers of ChatGPT and Claude are very different from steel manufacturers, and owning a minority stake in a company does not amount to public ownership, and does not mean that the American public will benefit from the company’s profits. AI is expected to transform every industry, touch every aspect of our lives. The U.S. has no federal AI laws, which the current administration believes would stifle innovation and blunt its edge against China. If the government held stakes in AI companies, there may be even less incentive to intervene on safety, antitrust, and content regulation, or take any regulatory action that may affect their market value.\n\nThere may also be other conflicts of interest. Should users be worried about privacy and government surveillance? Will [data centers](https://restofworld.org/2025/ai-data-centers-fallout/) be greenlit without public consultations or state approval? What about the growing pile of lawsuits against AI companies — would users and [states](https://www.politico.com/news/2026/07/08/floridas-openai-lawsuit-federal-court-aileen-cannon-00990156) still be able to sue AI companies if the government held stakes in them? When Apple and OpenAI [go to court](https://www.bloomberg.com/news/articles/2026-07-10/apple-sues-openai-for-trade-secret-theft-in-blockbuster-case?), whose side will the government take? And what if their revenues fall — will government ownership make these firms “too big to fail?” It’s a very slippery slope.\n\nWhen the government becomes a shareholder in a private-sector entity, “politics trump profits, favoritism and cronyism take root, innovation suffers, competitiveness erodes, and regulation is corrupted,” former presidential candidate Michael Bloomberg [wrote](https://www.bloomberg.com/opinion/articles/2026-07-20/michael-bloomberg-government-owned-ai-is-a-dangerous-idea) this week, calling it “a dangerous idea.”\n\nIt’s a divisive issue. Mona Sloane and Emanuel Moss, professors of data science** **at the University of Virginia, argued in a [recent paper](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6502522) that since AI systems “are infrastructures that intersect with the public interest in vitally important ways,” they should be reframed as a public utility. This will ensure public accountability and establish democratically governed AI infrastructure, they said.\n\nCuriously, in exploring ownership in AI companies, the U.S. is considering a path already taken by China. Beijing holds stakes in major tech companies, known as “golden shares,” which give it special voting power and veto rights over corporate decisions. China’s state-backed AI industry fund [plans to invest](https://www.wsj.com/tech/ai/china-to-invest-in-deepseek-at-50-billion-valuation-045041d0) in one of its best-known frontier companies, DeepSeek.\n\nBut the Chinese government’s ownership in AI companies is largely about self-sufficiency. The national AI fund targets firms across the entire ecosystem, from chip design to AI applications, and its investments are aimed at having companies align with the country’s strategic interests. China also offers incentives and subsidies while regulating[ strictly](https://finance.yahoo.com/technology/ai/articles/bytedance-alibaba-remove-ai-companion-182257722.html) — and quickly — on matters such as safety, content, and export controls to ensure AI that is “[secure and controllable](http://english.scio.gov.cn/topnews/2026-07/18/content_118605932.html),” as President Xi Jinping said last week.\n\nAmericans are [not as excited](https://restofworld.org/2026/ai-optimism-asia/) about AI as others across the world. The [unease](https://restofworld.org/2026/samsung-south-korea-union-ai-profits/) is likely set to grow as upcoming IPOs make a small handful in the AI industry extremely wealthy. Trump is right to worry that the benefits are not being shared equitably with the broader public. But a government stake in AI companies is not the answer. Instead, a government fund [like China’s](https://www.scmp.com/tech/policy/article/3306047/new-ai-fund-china-pour-us8-billion-early-stage-projects) that invests in startups, or an AI safety institute like [Singapore’s](https://sgaisi.sg/) or the [U.K.’s](https://www.aisi.gov.uk/), is a better bet for the industry — and the public.", "url": "https://wpnews.pro/news/why-state-owned-ai-wont-solve-inequality", "canonical_source": "https://restofworld.org/2026/ai-government-ownership/?utm_source=rss&utm_medium=rss&utm_campaign=feeds", "published_at": "2026-07-24 13:00:00+00:00", "updated_at": "2026-07-24 13:08:28.521805+00:00", "lang": "en", "topics": ["ai-policy", "ai-ethics"], "entities": ["Donald Trump", "Bernie Sanders", "OpenAI", "Anthropic", "Michael Bloomberg", "University of Virginia", "Mona Sloane", "Emanuel Moss"], "alternates": {"html": "https://wpnews.pro/news/why-state-owned-ai-wont-solve-inequality", "markdown": "https://wpnews.pro/news/why-state-owned-ai-wont-solve-inequality.md", "text": "https://wpnews.pro/news/why-state-owned-ai-wont-solve-inequality.txt", "jsonld": "https://wpnews.pro/news/why-state-owned-ai-wont-solve-inequality.jsonld"}}