Bernie Sanders’ AI Sovereign Wealth Fund Plan
Let no one accuse Bernie Sanders of ducking the big questions. Writing in the New York Times last week, the senator asked: “Will the future of humanity be determined by a handful of billionaires who have promoted and developed AI, with virtually no democratic input, who stand to become even richer and more powerful than they are today?”
We agree entirely that this is one of the most potent questions facing global democracy today. Our book, Rewiring Democracy, surveys the emerging uses for and impacts of AI in democracy around the world and reaches the same conclusion: that the most urgent risk posed by AI is the concentration of power, wealth and control among tech oligarchs.
And yet we reached a vastly different conclusion than Sanders on what to do about it.
The senator points to a once radical but increasingly popular solution: creating a US sovereign wealth fund by taking 50% stock in AI companies such as Anthropic, OpenAI and xAI. The argument in favor of this is twofold. One: it would establish democratic control over the AI companies, giving the government “the power, through its voting shares and an equal representation on each company’s board, to block decisions that hurt our citizens and to push for policies that help them.” Two: it would return a big chunk of the economic rewards of soaring AI valuations to the public, ensuring “trillions of dollars potentially generated by AI are used to improve the lives of all of us.”
We laud both these goals unreservedly.
We wholeheartedly agree that there must be public influence over the development and use of AI, just as we demand the government intervene to ensure that automakers, drugmakers, airlines and other industries balance profitability with public safety and the public interest. And we credit the senator with recognizing that there are more levers for the government to pull beyond the promulgation of regulation to achieve this.
And we also agree that the obscene, dangerous accumulation of wealth among AI companies needs to be disrupted. As OpenAI and Anthropic race to be minted as the world’s latest trillion-dollar AI companies, we should recognize that—whether or not it constitutes a bubble—these staggering market capitalizations represent a transfer of wealth. The flow of money goes from the smaller businesses and actual people using AI, and being subjected to it, to the owners of these tech companies.
That includes the world’s 86 AI billionaires “seeking to maximize their power and profit” aiming to decide the “fate of humanity… behind closed doors in Silicon Valley,” as Sanders said.
And yet, while we do not outright oppose the taking of AI company stock, or of a US sovereign wealth fund, there are better ways to achieve Sanders’ stated goals.
Public ownership of these companies entangles corporate profit and valuation with the public interest. It would incentivize the government to clear regulations, permit the exploitation of workers and users, suppress competition, encourage AI adoption regardless of the responsibleness of the implementation or appropriateness of the use case, and otherwise act on behalf of corporate interests.
After all, if growing, say, Nvidia from its first $5tn in value to its next $5tn also represents a doubling in value of this segment of the sovereign wealth fund, then you can expect the fund managers to support chip sales, foreign and domestic, with the same zeal as the company’s private investors.
This is not an effective way to influence corporations to act in the public interest. In fact, it makes corporate influence on the government more likely.
We should be wary of this possibility because we’ve seen it before. Ownership of substantial stakes in oil companies by the Norwegian sovereign wealth fund, the world’s largest, does not seem to have steered those corporations to pro-environmental policies. Instead, the Norwegian government’s dependence on those companies has inhibited them from taking climate action. Here in the US, public employee pension funds merit the same criticism: the fiduciary duty to generate wealth overwhelms any intention to direct their corporate holdings in the public interest.
A better answer is to separate the two goals. The standard way to share private rewards with the broader society that made them possible is taxation. Senator Elizabeth Warren has proposed an excise tax on datacenters’ energy use. Others have proposed an AI token tax, which has much the same effect.
As to the goal of reshaping AI in the public interest, we have proposed an AI Public Option. The concept is for governments, be it federal or state, to establish publicly developed and operated AI models run by public institutions under democratic control. The idea is not to eliminate corporate AI or to seize it as a public asset, but rather for government to provide a competitive baseline that private AI offerings must meet or exceed to win business—just like the notion of a healthcare public option.
The Swiss have trailblazed this approach. Apertus is a large language model built by Swiss public servants, researchers at Swiss universities, using appropriately licensed training data and pre-existing Swiss public supercomputing infrastructure powered by renewable energy.
While Apertus doesn’t seriously compete with the latest OpenAI and Anthropic models on performance benchmarks, it blows them out of the water in transparency, sustainability and compliance with EU regulations including adherence to copyright. It’s a nascent project, but suggestive of how public institutions can apply competitive pressure for corporate actors to behave responsibly.
Don’t confuse public AI with “sovereign AI,” the notion that every country needs to invest in domestic AI infrastructure. Sovereign AI is often invoked as a marketing scheme for big tech companies looking to sell to governments; it demands public investment without guaranteeing public control.
Sanders is a bold and savvy political operator. So why is he pursuing the sovereign wealth fund strategy when he must be aware of these risks? It may be due to another argument he makes in his op-ed: that the Trump administration and the billionaire owners of AI are aligned to the idea.
It’s expedient to capitalize on rare moments of seeming alignment across diverse political factions, but it also behooves us to ask why the AI billionaires are open to this extraordinary intervention. The answer, of course, is that they believe that for every dollar ceded to government stock expropriation, they will get back more in favorable government policies to protect that newfound investment.
Energy taxation is a straightforward way to make AI companies pay for the social disruption of their technologies. Public AI represents a non-monetary mechanism for governments to shape the development of AI, complementary to direct regulation of private actors, one with a far greater chance of influencing corporate behavior towards the public interest. We urge Sanders and other political leaders to consider them.
This essay was written with Nathan E. Sanders, and originally appeared in The Guardian.