Opposition to an AI sovereign wealth fund: The proposal is criticized as highly dangerous, handing Trump more opportunities for cronyism and corruption while misunderstanding that the U.S. already practices industrial policy through patents, copyrights, and infrastructure choices. 

Risks of inflating the AI bubble: Government stakes would distort capital allocation, prioritize political connections over market signals, and further boost already overvalued AI stocks (e.g., Nvidia near $6 trillion market cap), allowing billionaires to cash out without proven transformative benefits. 

Better alternative suggested: Replace the corporate income tax with mandatory issuance of non-voting shares equal to the tax rate (e.g., 21%), ensuring reliable revenue, eliminating tax shelter waste, and avoiding direct government ownership or control of private companies.

Since I keep hearing people singing the praises of the possibility of left-right collaboration over the idea of an AI sovereign wealth fund, I’m going to take another opportunity to trash it. This is not just a bad idea; it is a seriously bad idea. 

There are three main reasons:

It gives Trump sycophants more power;

This approach misunderstands industrial policy;

The debate helps to promote the AI bubble.

I’ll take these in turn.

Yet More Opportunities For Trump Grift

There seems to be an idea among some on the left that if the government runs a company, that we will have honest, competent people in charge who act for the public good. In a best-case scenario, this can be true. But that is very much the exception, and definitely not the case in Donald Trump’s America.

In the normal course of things, we can expect to get career civil servants who are generally honest but typically not big risk-takers. That is not necessarily a bad thing; we don’t want to take big risks with things like air traffic control,........

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