OpenAI CEO Sam Altman has proposed that the U.S. government take minority ownership stakes in leading artificial intelligence companies to ensure the public benefits financially from the sector’s growth. Reports indicate Altman suggested a 5 percent government stake in OpenAI, which would be valued at approximately $42.6 billion based on current market prices.

Senator Bernie Sanders of Vermont advocates for the government to hold a significantly larger share—up to 50 percent—in top A.I. firms, with shares placed in a sovereign wealth fund controlled by the state. He argues that such ownership would not only provide a share of profits but also grant the government greater influence over the development of transformative technologies. Former President Donald Trump has also expressed support for government holding stakes in A.I. companies, describing the idea as “a beautiful thing.”

However, experts and commentators caution against state ownership in this sector, emphasizing that government interests are better served through taxation and regulation rather than direct corporate investment. Taxation allows the government to collect revenue as an industry expands, while regulatory frameworks provide tools to oversee corporate behavior without the government becoming a market participant.

Critics note several drawbacks to government ownership, including the risk of reduced competitiveness and innovation due to insulation from market pressures. Additionally, state stakes can complicate regulatory oversight, as governments may hesitate to enforce rules that would negatively impact assets they own. Concerns have also been raised about potential conflicts of interest if current political leadership holds such stakes. The risk of government resources being used for personal or political gain is highlighted by some as an additional complication.

Historically, government ownership of companies has declined in many market economies. During the mid-20th century, state-owned enterprises constituted a larger portion of national economies in several democratic countries. But over recent decades, there has been a clear shift toward privatization, with evidence suggesting that private companies tend to outperform state-owned firms in many industries. Currently, government-owned entities account for a small fraction of market capitalization among developed economies.

While governments do own and manage some essential services, such as healthcare and public transportation, these sectors typically address market failures. Artificial intelligence, by contrast, is generally viewed as a commercially viable industry that does not require state intervention through ownership. Instances of government investment during crises—such as the bailouts of banks and major corporations during the 2008 financial crisis—have been structured as temporary measures rather than long-term commitments.

Proposals for government stakes in A.I. companies often suggest nonvoting shares to limit direct control, with the idea that the public would share profits without influencing corporate decisions. However, historical examples indicate that even indirect ownership can affect corporate behavior and regulatory enforcement. The experience with government-affiliated entities like Fannie Mae and Freddie Mac illustrates how implicit government backing may encourage risk-taking, which can have systemic consequences.

Experts argue that ownership may actually reduce the government’s ability to regulate effectively. For instance, state involvement in oil companies in Norway, South Africa, Singapore, and France has at times led to more lenient enforcement of environmental or financial regulations, illustrating potential conflicts between government roles as both owner and regulator.

Ultimately, commentators suggest that addressing the challenges and opportunities presented by A.I. requires robust legislative and regulatory action rather than government investment in private companies. Ownership stakes are not seen as a substitute for oversight or policymaking. The federal government’s key responsibilities should focus on ensuring equitable distribution of A.I.’s benefits and mitigating risks through appropriate laws and regulations.