Trump Opened the Door for Sanders’s Sovereign Wealth Fund

Tad DeHaven

Sen. Bernie Sanders, the self-described democratic socialist from Vermont, wants the federal government to own half of America’s largest artificial intelligence companies, and he plans to introduce legislation to make it happen. But any criticism from Republicans and their allies will ring hollow given their muted opposition to Donald Trump’s own government-ownership spree. 

In fact, some congressional Republicans have moved to enshrine equity stakes in statute. 

Sanders’s move shows why that muted opposition, which includes the Trumpian right’s media ecosystem and nominally pro-market advocates, could end up giving the Democrats and their progressive allies the direct control over the corporate boardroom they’ve long coveted. Under Trump, too many have treated the same basic idea as dealmaking. But this shows where the Pandora’s box that the Trump administration opened leads when the other side decides to use it openly and ideologically. 

In a New York Times op-ed, Sanders announced that he will soon introduce the American AI Sovereign Wealth Fund Act, which would impose a one-time 50 percent tax on large artificial intelligence companies, paid not in cash but in stock. The result would be direct federal ownership, voting shares, and equal government representation on company boards. 

Sanders is candid about his goal. He doesn’t merely want taxpayers to share in the financial upside—a bogus justification the Trump administration also likes to trot out. Sanders wants political control, and says the government should use its voting shares and board representation to block decisions it considers harmful and push policies it considers beneficial. 

Gee, what could go wrong? 

For starters, the federal government already regulates these companies. It buys from them, taxes them, and investigates them. It can sue them, prosecute them, or even subsidize them. So when the government becomes a major shareholder, neutrality becomes impossible. It’s the corporate equivalent of referees in the NBA Finals or Stanley Cup Final having a financial stake in the teams on the court or ice: They’re no longer just calling the game, they have skin in it. 

Sanders points to Norway’s and Alaska’s wealth funds as models, but those comparisons don’t work. Norway and Alaska built their funds from resource revenues generated by oil and minerals the government already owned or controlled—not by imposing a 50 percent stock tax on private companies or installing political directors on corporate boards. Whatever one thinks of those funds, they’re hardly precedents for Washington to confiscate half of private firms because some politicians declare an industry too important to be left alone. 

But as Sanders notes, it’s Trump who helped open this door with his February 2025 executive order directing the Treasury and Commerce Departments to develop a plan for a US sovereign wealth fund. It was a bad idea then, and it’s only gotten worse as the administration has instead pursued an ad hoc presidential investment portfolio to avoid Congress creating a formal legal structure with funding rules, transparency, and guardrails. 

That administration has now taken or announced equity stakes, warrants, and a golden share in over 20 private companies. No longer content to subsidize, regulate, or contract with private firms, the Trump administration has sought to own, steer, and discipline them. 

Trump’s supporters and apologists call this hard-nosed dealmaking, but it’s a grotesquely transactional form of state corporatism. It’s also utterly corrupt. 

That’s the Pandora’s box the Trump administration has opened, and Sanders is showing exactly what could come next. 

Government ownership goes bipartisan.

During the debate over the 2022 CHIPS Act, Sanders and Sen. Elizabeth Warren (D‑MA) pushed an amendment that would have required companies receiving semiconductor subsidies to provide the government warrants, equity stakes, or senior debt. The amendment failed, but the ideology behind it never disappeared, as the left has long believed that if companies receive government support, the government should claim ownership and control in return. 

Indeed, in late 2024, the Biden administration was working on a sovereign wealth fund proposal, an idea that the Trump administration has now given bipartisan cover. 

Republicans may insist Trump’s version is different, likely claiming that Sanders wants socialism while Trump merely wants taxpayers to get a better deal. But once the federal government starts demanding ownership stakes in private firms, the principle has already been conceded; the remaining fight is only over which party gets to exercise the power and toward what ends.

Democrats could cite Trump’s stakes in semiconductors, minerals, steel, defense, and quantum computing to justify government stakes in artificial intelligence, climate, housing, health care, or any industry they claim is too important to leave to the market. What then will congressional Republicans, the cable talking heads, and defenders of free enterprise (when Democrats are in control, anyhow) say after having acquiesced to, or helped enable, the Trump administration helping make the left’s dream come true? 

Sanders’s AI sovereign wealth fund should be rejected, but so should the Trump precedents greasing the skids for it. The midterm elections in November are fast approaching, possibly leaving congressional Republicans little time to formally unwind the Trump administration’s positions and prohibit the executive branch from taking ownership stakes in private companies in the first place. 

The odds of that happening are admittedly not great. And unfortunately—as Reason’s Eric Boehm puts it—the current choice in our “two-party system means choosing between a politician who wants the government to own part of U.S. Steel and a politician who wants the government to own Anthropic.”

Source: https://www.cato.org/blog/trump-opened-door-sanderss-sovereign-wealth-fund