michael-dean-k/

Bernie wants to pull off a 50% one-time equity tax on the top 3 AI firms (OpenAI, Anthropic, xAI). This is ripe time for a mainstream populism to ride the tailwinds of AI populism, tapping into hatred and impending doom and the whole gambit of middle class paranoia, ripe time to propose a century-defining redistribution scheme. He opens by saying that AI was stolen from us, built from our collective intelligence, and therefore it's a national utility that the people should own. To ground it in reality, he used the Alaskan sovereign wealth fund as precedent, citing how citizens get paid annually from oil sales. We'll likely see many more of these proposals leading up to our 2028 election. But after you do some napkin math, you realize that this plan is bogus: no one would agree to it, and even if they did, it wouldn't benefit the American people.

This is citizen ownership in rhetoric, but government ownership in structure—a passthrough mechanism as a Trojan Horse with Pete Hegseth and the goons inside. Realistically, I don't think this is meant to be a serious proposal; the labs won't accept it. It's more so a gesture to buy goodwill for the Democrats at a time when mass hatred for AI is cresting.

Here are the issues I see with the concept (along with some grasping for solutions):

1_We don't need government equity, but guaranteed royalty distribution:

This is not a profit tax, but a way to formalize government seizure through an equity transfer. It even comes with board seats within thees AI companies. Remember, this is the same government that tried to force Anthropic to allow unrestricted domestic mass surveillance and autonomous weapons. The equity only gets to the citizens if the stock appreciates, they convert it to cash, and then decide to write welfare checks. Does our current government seem like a voluntary patron of citizen welfare right now? Will welfare checks beat Iran and China? And even if this were intended to be a passthrough mechanism, it would be very hard to make all that equity liquid.

The Alaska fund that Bernie mentioned is structured very differently. It's anchored not in equity, not in profits, but in revenue. 25% of Alaskan oil revenue goes to a constitutionally-protected fund, which is then reinvested into the stock market; the principle is locked and the dividend is split among citizens, usually $1-3k per year. Could a similar model work for AI companies?

This would never work with profits, because AI companies aggressively reinvest. In the short-term, an AI company would resist a revenue royalty because it would slow expansion, but: (1) if all companies did it, they wouldn't be disadvantaged; (2) it beats equity because they retain full control of their company; and (3) if they believe they'll be wildly profitable, then a 10% royalty is possibly more than half of what dividends would pay from 50% equity. So what could a 10% royalty return?

By the 2040s, annual AI revenue could be $20T globally across software, hardware, data centers, and energy. If America has half the market, and 10% is distributed to a citizen fund, that's a $1T annual budget, completely liquid. So how do you use it?

2_ We shouldn't redistribute equally, but strategically:

Alaska has 738,000 residents. The US has 350,000,000, almost 500x bigger. You can do equal distributions at the state level, but at the federal level it'd ineffective. When we talk about UBI or even Elon's UHI (universal high income), we need to realize that U doesn't work at scale beyond pilots. $1T distributed to every American citizen yields $2,857/year. This matches the upper-end of Alaskan payouts, but it's nowhere near what we need to account for AI-driven automation and disruption.

And so instead we need to be strategic over how we distribute it to cover the wide range of effects. Maybe 50% of the fund is reinvested, and the dividends are redistributed based on income (with most of it going to the bottom 10-25%). The other half can be used on housing, free medical diagnosis and prescriptions, free education, New Deal style jobs concentrated in areas that can't be automated (childcare, healthcare, etc.). Who decides this breakdown?

3.Instead of a cabinet agency, this needs an independent board:

If we want citizens to own AI, then we need some form of citizen representation to guide it's growth, otherwise it all devolves into technocratic expansion and war. You could imagine some kind of tripartite board structure, where it has government reps, industry reps, and citizen reps. Any single branch has a myopic set of interests, including the citizens. The citizen branch might undervalue national security or capability improvements, but without it, there's no one representing the problems that hundreds of millions will face.

What I'm reaching at here, I think, is that it's more than just getting a check for theoretically contributing to the LLM hivemind. There's something important to me, as a citizen, to have some say in where AI royalties are redirected. Whether I participate simply as a voter, or I work hard and get anonymously elected to represent my state for a single issue within a liquid republic, who knows. And again it goes beyond just getting and allocating money, but this board should be involved in AI-related policy, especially as it relates to domestic matters.

It's unlikely that power will just be granted to citizens, for they have no leverage next to the ones with the tanks and algorithms. But as the governors and technocrats quarrel, there's a world where a mediating party comes in, and maybe it's their role to insist that a citizen branch can help round out the dynamic.

This last point has basically veered into redesigning government itself, which is both out of scope, but also, possibly, exactly the point. Bernie's whole play is to let the people own AI, but for that to actually expand beyond populist rhetoric, citizens need a more meaningful way to engage with civic matters than to vote for a president once every four years, they need actual representation.