Unexpected Consensus: Bernie Sanders and Donald Trump Align on AI Government Ownership
In an unprecedented political alignment, progressive Senator Bernie Sanders and former President Donald Trump have found common ground on an unlikely issue: federal government ownership stakes in major artificial intelligence companies. This rare bipartisan agreement warrants careful examination of the implications, motivations, and potential consequences of such a policy proposal.
Both Sanders and Trump have recently emphasized that the federal government should hold equity ownership in large AI corporations. For Sanders, this represents not only a mechanism for the American public to share in the wealth generated by AI companies but also a means for government representation in determining how these powerful entities operate in the future. Sanders envisions this as a way to ensure AI development aligns with public interests rather than purely private profits.
The Current State of the AI Industry
A fundamental issue complicates this proposal: current AI companies are not actually generating substantial assets. They are burning through billions of investor dollars without clear paths to profitability. The AI industry does not follow the same trajectory as previous technological revolutions like the internet or smartphones, where costs rapidly decreased as technology matured and user bases expanded. Contrary to historical patterns, after years of AI hype, the cost of delivering AI products continues to rise without signs of reduction.
Adding users does not reduce unit costs because more users require more resources. This stands in stark contrast to traditional software models, where the marginal cost of distributing an existing product to the next consumer approaches zero. The AI industry's economic model appears fundamentally different and potentially unsustainable.
Expert Warnings and Industry Criticisms
As early as November of last year, concerns were raised that AI companies were positioning themselves for a bailout, likely resulting from their flawed models failing to deliver promised capabilities. AI critic Ed Zitron, in a recent interview, noted that when he asks AI industry proponents to describe what AI currently does without using future-tense language, they have little to offer. Zitron concurred that while search engines are using AI to provide more sophisticated results, these outputs are becoming less reliable. He stated: "You have to check everything. You can't trust anything."
Just two days after Zitron's interview, the Financial Times reported on an AI-related report by KPMG, one of the "Big Four" accounting firms. The report contained several false statements about AI usage in corporate, government, and nonprofit organizations, apparently resulting from "AI hallucinations" – fabrications generated without factual basis. While the report has since been retracted, it's notable that KPMG was simultaneously promoting services to help clients integrate AI into their organizations.
Significant Issues Within the AI Sector
The AI industry faces numerous challenges beyond questionable financial models. The Ohio Business Roundtable, an influential lobbying organization, is attempting to persuade Ohio legislators to change land ownership laws to allow AI companies to seize private land for energy projects supporting their data centers without compensation. This raises critical questions: Why can't these supposedly successful AI companies pay people before using their land?
This behavior suggests desperation rather than prosperity. If these companies were truly generating substantial value, they would have the resources to compensate landowners fairly. Instead, they appear to be seeking special treatment and regulatory advantages to sustain their operations.
AI Capabilities and Potential Risks
Multiple indicators suggest that current AI models may deliver less impact than advertised. Financial realities do not lie. If the government becomes entangled with equity stakes in AI companies, it risks falling into a potential trap. Notably, the CEO of OpenAI, the most prominent AI company, proposed this government ownership idea to Trump early last year. Why would a top executive seek to dilute his own and shareholders' assets by giving government equity? The possibility that he anticipates needing a bailout cannot be ignored.
Facing Financial Realities
Currently, the AI industry is persuading legislators and current administrations that AI represents the future of technology and therefore cannot be allowed to fail. However, capital expenditures by AI companies are driving economic growth and stock market performance. A collapse among major players in the sector could result in significant losses for many Americans' portfolios and retirement savings.
| Financial Metric | Value |
|---|---|
| Estimated capital required for profitability | $2 trillion in next 4 years |
| Global software industry revenue (2025 projection) | $719 billion |
| Failure rate of AI projects | 80% |
| Percentage of S&P 500 companies with meaningful AI benefits | 21% |
Conclusion: Market Solutions vs. Government Intervention
The current AI industry does provide some value to many users. One might argue that AI deserves subsidy as a public good, similar to public transportation. However, such an approach would only be effective if users are willing to pay more for current AI services. Otherwise, the market should determine AI's viability.
If someone develops an AI model that proves profitable for both businesses and the public, it should be allowed to flourish without government intervention. Currently, the AI industry appears to be seeking a government sponsor to cover bills that its leaders have created, potentially to protect their personal assets when the "AI bubble" bursts. The rare Sanders-Trump consensus on this issue may be less about visionary policy and more about addressing the consequences of an unsustainable economic model.