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These are dark days for free-market economists when one of the few areas of bipartisan consensus is for a terrible idea: Both Vice President JD Vance and Senator Bernie Sanders want the federal government to take an explicit stake in AI firms.
Both would like to create a sovereign wealth fund made up of shares of AI-related companies. At first glance it may seem reasonable. This is the fastest growing sector of the economy and will make some people very rich. Why not give the government a piece, which it can then redistribute to the less fortunate?
The Sanders bill is more extreme. It involves taking a 50% share of AI companies and putting the government ownership in a sovereign fund. By comparison, Vance’s proposal is relatively tame and vague; it involves the government buying some shares in AI companies, and perhaps putting them in a fund, as Trump has expressed interest in a the US having a sovereign wealth fund.
Continue reading the entire piece here at Bloomberg Opinion (paywall)
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.