Senator Bernie Sanders (I–Vt.) offered a preview of his latest AI legislation in The New York Times, hinting at a socialist framework for the tech sector. With the bill text now published, we can see just how extensive government ownership of AI would become.
On Thursday, Sanders unveiled the American A.I. Sovereign Wealth Fund Act, proposing a 50 percent levy on AI firms with annual gross receipts of at least $200 million, payable via stock. Targeting gross receipts rather than revenue is a strategic move, since many AI-centered companies are not yet profitable, and gross receipts encompass total earnings from all sources, broadening the pool of entities subject to the tax.
Under the measure, the Treasury Department would also hold a 50 percent stake in all qualifying AI companies through newly issued shares, and the federal government would be allowed to tax any shares issued after the initial seizure, ensuring the government’s half remains at fifty percent over time.
Each fiscal year, every U.S. resident would receive direct payments from the fund, financed by a 5 percent draw of the average value of the stock the government holds. Sanders says this could amount to as much as $1,000 for each American.
Sanders asserts that the fund could raise about $7 trillion based on the current valuations of the companies slated for taxation. Yet a tax tied to gross receipts reflects a company’s economic worth, and imposing it would likely suppress that value.
While the bill’s title might suggest that only firms such as Anthropic and OpenAI would be taxed, the reach is broad across the technology sector. The measure would apply to any “corporation or partnership” engaged in a trade or business linked to data centers, computing infrastructure, AI services, or the research, development, or manufacturing of advanced robotics. Firms like Tesla, Waymo, Nvidia, and Dell would face the 50 percent levy, even though their business models predate those of newer AI players Sanders has criticized.
Adam Thierer, senior fellow for technology and innovation at the R Street Institute, describes Sanders’ bill as “the most grotesque form of crony capitalism.” In an interview with Reason, he characterizes the legislation as containing “a lot of counterintuitive reasoning.”
Indeed, the bill blurs the line between private and public ownership and overrides existing corporate charter limits, compelling companies to issue and surrender stock to meet the 50 percent threshold, regardless of shareholders’ wishes.
It also mandates that AI ventures be spun off as standalone entities. It prohibits non‑AI business activities, bans joint ventures with non‑AI firms, and limits the sharing of personnel or financing with non‑AI companies.
Beyond seizing assets, the proposal creates a brand-new regulatory framework for the AI sector and the broader tech industry. It would establish an Independent Commission for Democratic AI within the Treasury, made up of seven commissioners appointed by the president and nominated by congressional leadership, serving five‑year terms. Five of the commissioners would be required to have specific expertise, including backgrounds in labor interests, the AI industry, national security, privacy, and the management of a fund of comparable magnitude.
No more than four commissioners could come from the same political party, and they would exercise all voting and governance rights associated with the government’s ownership stake through appointed representatives on each company’s board of directors. The number of representatives would correspond to the government’s stake, and these representatives could cast votes only in ways that advance worker welfare, public safety, fair competition among applicable AI companies, environmental sustainability, and financial solvency.
In a distorted reimagining of fiduciary duty, the bill requires commissioners and their delegates to vote for these interests even when doing so would conflict with the financial interests of the company or its other equity holders. Here, Sanders contradicts the very aim of his proposal. A business acting against its own financial interests cannot reasonably be expected to stay profitable, which would jeopardize the wealth fund’s success.
Sanders isn’t the sole advocate of a sovereign wealth fund. The leaders of OpenAI, Anthropic, and xAI, along with President Donald Trump, have all endorsed the idea of a system of formalized direct payments funded by the AI industry.
The president has also made a habit of taking “golden shares” in companies he deems critical to the nation’s economic or security interests. Now, Sanders has taken the next logical step on the socialist ladder, shifting from voluntary disbursements to outright seizure of property.
