An AI Trojan Horse

Beware of tech bros bearing gifts

Donald Trump and Sam Altman are attempting to convince the American people that they, too, can benefit from an economy built upon artificial intelligence companies.

On Friday, the president shared the outlines of his plan to include regular Americans in “a partnership” with an unspecified number of leading AI companies. “There’s so much money, and it’s so big, that there are concepts where pieces [of AI companies] could be given to the American public,” the president told reporters aboard Air Force One, “where the American public essentially becomes a partner with the companies.”

Trump’s sales pitch was almost identical to a public-private arrangement that OpenAI and Altman, the company’s billionaire chief executive, have recently championed. OpenAI published a policy paper in April that called for the creation of a “public wealth fund” seeded with equity in AI companies and designed to distribute “returns” to Americans. Last week, Altman also met with lawmakers on Capitol Hill to lobby for partial public ownership of AI companies. His discussions included an hour-long meeting with Sen. Bernie Sanders, who has called for AI companies to be 50% state-owned.

While pitched as benevolence, the plans from both Trump and OpenAI could lay the groundwork for a future in which American taxpayers could be compelled to bail out OpenAI, a debt-laden company that lost billions of dollars last year and faces astronomical costs in the years to come. An OpenAI executive has previously suggested that the government could offer a “backstop” for the company, allowing it to take on more debt.

“It would make them rich”

OpenAI, the maker of ChatGPT, is a privately held company that plans to go public later this year with a $1 trillion valuation. Despite that figure, OpenAI is a loss-making company and is burning cash faster than any company in the history of Silicon Valley. It burned $8 billion last year, expects to burn $218 billion through 2029, and — using a combination of debt, equity, and dubious financing maneuvers — has committed to spending roughly $1.4 trillion through 2033 building the data centers that power its ChatGPT large language models.

OpenAI, in other words, loses a lot of money and has no sure path to paying off its exorbitant, rapidly rising bills. But if Trump forces the public into “a partnership” with the company, it immediately becomes more plausible that the federal government could use taxpayer dollars to cover OpenAI’s costs.

If the wealth held by individual Americans is directly tied to the success of spendthrift AI companies, then the government will have a justification to treat those companies like they are “too big to fail.”

Sweeping public partnerships with AI companies could also be used to head off attempts to regulate the industry, as the federal government would be incentivized to block any rules that could slow its frenzied growth or spook investors.

Trump, meanwhile, is fixated on maintaining what he has called a “hot” stock market under his tenure. The staggering capital expenditures by AI companies and optimism about their growth prospects are the primary forces preserving the market’s bull run against strong macroeconomic headwinds.

On Friday, however, Wall Street experienced its worst slide since October, led by a massive sell-off in leading tech stocks like AI developer Meta and AI chip designer Nvidia. Announcing plans for the federal government to invest in or enter into partnerships with AI companies could reinvigorate the market.

Trump said he would discuss the AI “partnership” plan during a meeting with “all” of the leading AI CEOs at the White House next week. He also insisted he would be doing Americans a favor by tethering them to AI companies. “You make them a partnership in this revolution, it could be a beautiful thing,” said Trump. “It would make them rich.”

“Every citizen… with a stake in AI-driven economic growth”

Speaking at a tech conference in November, OpenAI Chief Financial Officer Sarah Friar said the company — in order to increase the amount of debt it could take on to fund its data center construction mania — was interested in securing a government-backed safety net. “This is where we’re looking for an ecosystem of banks, private equity, maybe even governmental, the ways governments can come to bear,” she said. “The backstop, the guarantee that allows the financing to happen, that can really drop the cost of the financing.”

Friar and Altman then frantically attempted to walk back those comments following backlash from lawmakers and media figures. “We do not have or want government guarantees for OpenAI datacenters,” Altman wrote in a 1077-word post on X at the time. “We believe… that taxpayers should not bail out companies that make bad business decisions or otherwise lose in the market.”

While Altman had sought to secure taxpayer funding for OpenAI in 2017, the company now claims its technology will drive so much growth that it will be in a position to give free money to “every citizen.”

OpenAI floated the initiative in an April white paper calling for a slew of policy overhauls to wean the country into the “Intelligence Age.” Among its recommendations was the creation of a “Public Wealth Fund” that would provide “every citizen… with a stake in AI-driven economic growth,” ensuring that “people directly share in the upside of that growth.”

The fund would be made up of assets “that capture growth in both AI companies and the broader set of firms adopting and deploying AI.” And any returns from the fund, the paper continued, “could be distributed directly to citizens, allowing more people to participate directly in the upside of AI-driven growth, regardless of their starting wealth or access to capital.” (The Financial Times reported that one option being discussed would involve AI companies voluntarily placing a small portion of their shares into a public fund.)

According to the Wall Street Journal, Altman has also suggested that the AI wealth fund could be structured like the newly created Trump Accounts, which allow eligible parents to start a savings account for their children using $1,000 in government funds.

“Probably the biggest industry, maybe”

In Trump’s pitch for a public-private AI partnership, he even described AI as “probably the biggest industry, maybe that we’ve ever seen.”

But to date, the top AI models have not driven economic growth outside the industry itself. Despite hundreds of billions of dollars in AI infrastructure and development spending since 2023, the productivity gains the industry has promised have yet to materialize. “AI is everywhere except in the incoming macroeconomic data,” Torsten Slok, Apollo Global Management’s chief economist, observed in February. “Today, you don’t see AI in the employment data, productivity data, or inflation data. Similarly, for the S&P 493, there are no signs of AI in profit margins or earnings expectations.”