The original deal behind the American AI boom appears to be: private investors would contribute funding and take on the risk; Private companies would first own the benefits of the breakthroughs and later distribute them to public markets; and the government would help regulate the industry after the fact. In contrast, in China, companies must continue to compete for investments and customers while the state provides the computing power.
This agreement is showing signs of failure – on the US side. As costs skyrocket, Chinese competitors gain ground and Washington increasingly views AI as a national security asset, President Donald Trump is considering a government stake in AI companies. While both the populist left and the right, and the AI companies themselves, have praised the proposal, one person isn’t cheering: billionaire Michael Bloomberg.
In an opinion column published in Bloomberg Opinion On Monday, the media company’s founder attacked the proposal, arguing that it would transform Washington from an industry regulator into an investor with profit incentives, leading to “nepotism.”
“Somewhere Karl Marx is smiling,” Bloomberg wrote of the centrally planned economy on offer, while the propaganda possibilities “would make George Orwell blush.”
The former New York City mayor argued that Americans do not need their governments to own AI companies to participate in technology advances. For one thing, once they go public, they could simply buy shares. But consumers and businesses are already benefiting from AI through fraud detection, medical research, accounting and other helpful applications, he wrote, while the resulting economic growth could ultimately lead to more tax revenue for public services.
If AI companies are not making enough contributions to the public, Bloomberg argued, Washington should adjust the tax code to serve the public; don’t buy them. Ultimately, he predicted, federal shareholders would likely lead to corruption as the market would turn into a “smoky backroom.”