Sanders Proposes 50% Stock Tax on AI Companies for Public Fund

Sanders targets AI equity with sweeping wealth fund proposal

Sen. Bernie Sanders has introduced legislation that would impose a one-time 50% tax, paid in stock, on AI companies generating more than $200 million in annual AI-related revenue. According to Forbes, which first reported details of the American A.I. Sovereign Wealth Fund Act, the initiative could create a public trust fund worth approximately $7 trillion.

The collected shares would be managed by a newly created Independent Commission for Democratic AI, with seven presidentially nominated, Senate-confirmed members. Sanders proposes distributing 5% of the fund's value annually to Americans, with future allocations potentially directed toward healthcare, education, housing, and environmental programs.

Why it matters

This proposal represents a fundamental challenge to how AI profits are distributed in the U.S. economy. With both Sanders and the Trump administration exploring sovereign wealth fund concepts for AI—albeit with vastly different scales—the question of public equity in AI companies has moved from theoretical to legislative. For technology leaders, the debate signals growing political momentum around the idea that taxpayers deserve returns on decades of public research funding that enabled modern AI breakthroughs.

The case for public ownership

Sanders grounds his proposal in two arguments. First, AI systems were trained on vast quantities of copyrighted material—books, music, code, scientific papers, and online content—created by millions of people who received no compensation or consent requests. Second, the scientific foundations of modern AI emerged from decades of taxpayer-funded research through agencies including the Office of Naval Research, DARPA, and the National Science Foundation, not purely from private venture capital.

Forbes notes that DARPA supported fundamental neural network research and autonomous vehicle development, while NSF grants seeded technologies that later became commercially valuable. The proposal frames taxpayers as the largest risk-takers in AI development, yet they currently capture none of the extraordinary returns.

Bipartisan convergence on government stakes

The sovereign wealth fund concept is gaining traction across the political spectrum. The Trump administration's 10% passive stake in Intel, tied to federal support commitments, reflected similar logic about public returns on public investment. Forbes reports that Trump, Sanders, and OpenAI's Sam Altman have all entertained versions of public equity in AI companies, suggesting this is no longer a fringe idea.

The political appeal spans different concerns: the left focuses on wealth concentration and labor exploitation, while the right emphasizes national security and debt reduction. Both sides worry about automation's social costs.

Significant implementation challenges

Critics identify several problems with Sanders's approach. A 50% equity claim could discourage investment in unprofitable AI firms still dependent on outside capital. Valuation presents another hurdle—many AI companies trade at prices disconnected from current cash flows, potentially forcing taxpayers to buy into a bubble.

Governance poses additional complications. Sanders's commission would balance worker welfare, public safety, competition, environmental goals, and financial returns—potentially conflicting mandates that could undermine fiduciary duty. The plan also requires separating AI from non-AI business operations, a distinction that becomes increasingly arbitrary as AI permeates all sectors.

The proposed 5% annual distribution is premature given that many frontier AI firms remain unprofitable or derive earnings from legacy businesses rather than AI itself. Paying dividends from unrealized paper gains could force asset sales at inopportune times.

A workable middle ground

Forbes suggests a more modest approach than Sanders's 50% claim but more substantive than Trump's initial executive order, which merely directed agencies to develop plans. Sound sovereign wealth fund design requires clear investment mandates, professional management, political independence, and fiduciary duty focused on long-term returns.

The article argues that when public resources, publicly funded science, and millions of people's labor create private fortunes, the public deserves a proportional claim on the value it helped generate.

Details of the legislation and analysis were reported by Forbes contributor James Broughel.