I have written before about my conviction that most people will eventually lose their jobs. White collar work gets automated first, then physical work as robotics catches up. It will probably take longer than I expect, because organizations are slow and politics is messy. But I have no doubt about the direction, it is inevitable. So the only real question left is, who pays for the people who can no longer earn a living?
This week that question moved into the centre of US politics, and I think most people may have missed how significant the moment was.
Taking a stake in AI companies
This week, US Vice President JD Vance said that President Trump likes the idea of the government taking a stake in American AI companies. He compared the AI revolution to the industrial revolution and argued that the problem back then was not mass joblessness, it was the concentration of wealth among a small group of people. That concentration is what drove parts of Europe toward fascism and communism. His point was that if you want to avoid that outcome this time, the public needs to share in the upside of the companies doing the disrupting.
I think that is a smart way to look at it. If you own a piece of the companies that will become the most profitable in the world (the AI companies, and later the robotics companies), then the future profits can flow back to citizens as dividends. Call it a sovereign dividend, call it social security, call it Universal Basic Income (or like Elon, Universal High Income. The name is not that important, what really matters is the mechanism.
I should point out that Vance said he actually prefers “pre-distribution” over simply handing people cash. In other words, give people an ownership stake in the upside rather than a welfare cheque. I like that distinction, because ownership changes how people relate to the system. A dividend feels like something you are part of, instead of just getting a handout.
Is this just a thought experiment?
When people hear “the government takes a stake in companies” they assume it is a thought experiment. It is not though: In August last year the US government took a roughly 10% stake in Intel, an $8.9 billion investment that made Washington the company’s single largest shareholder. Most of that was a conversion of money Intel had already been promised under the CHIPS Act into equity, rather than fresh cash, but the principle is what matters: the US government decided it should own a piece of a strategic technology company rather than just subsidise it. And Trump has openly said he wants to do more deals like it.
Obviously Intel is (or after the US ownership stake ‘was’) a struggling chipmaker, not a high-flying AI winner. The stake was about reshoring chip manufacturing, and not about building a dividend stream for citizens. So it is a precedent for the mechanism, but not proof that the mechanism produces the outcome I am describing. But once a thing has been done once, it gets done again more easily.
Libertarian vs. government intervention
Regular readers know I am a libertarian at heart. I do not like government intervention, and I really do not like state-owned enterprises. So a part of me is quite uncomfortable writing a post that amounts to “the government should own equity in the private sector.”
But I have learned to put ideology aside when you have no other choice. The reality is that if most people lose their income and there is no mechanism to share the gains from automation, you do not get a libertarian utopia. You get riots, you get civil unrest, and eventually you get a far worse and far less free government than the one you were trying to avoid. Vance’s industrial-revolution analogy is exactly right on this point. The societies that did not find a way to spread the gains got fascism or communism.
So I may not like it, but I think this is probably necessary. The ideal solution would be for people to simply invest in these companies themselves. That option is open to everyone right now, but most people do not see where this is going, do not have the spare capital, and do not think ahead. They will simply not do it. And telling people “you should have bought the right stocks” after the fact won’t help either.
Two issues
There are 2 issues that I need to point out.
First, the math may not work. A government stake pays a slice of profits proportional to the stake. A 10% holding gives you 10% of the profit, and even the combined net profits of every big US tech and AI company are nowhere near what it would cost to pay every adult a livable income. To fund UBI purely from dividends, the stakes would have to be enormous, which pushes you straight toward the state-owned-enterprise model I started out rejecting. Bernie Sanders has now actually filed a bill proposing 50% public ownership of US AI firms plus $1,000 dividends. That is the logical endpoint of the dividend argument, and it is also exactly the thing I do not want. So my conclusion is that dividends from modest stakes can fund a supplement, not a full replacement income. The rest has to come from somewhere else, most likely from taxing the handful of winners, which I have written about before. Or, and that is what I expect may happen, costs could go down so much that even the 10% stake can pay for a basic lifestyle for most people.
Second, it stops competitors from entering the market. The moment the government owns equity in a company, it has a financial interest in protecting that company. That is great if you are a shareholder, and I will come back to that, but it is bad for competition. It politicizes the firms and it makes it harder for the next disruptor to come along and take them out. As a libertarian, that is the part that genuinely bothers me. I would much rather see small stakes (think 5 to 10%, not 50%) precisely so the state has skin in the game without becoming the controlling owner. I hope it stays at that level. I doubt we will see 50% stakes become normal, but who knows. The Overton window is moving fast.
The investor angle
I believe that if you think about money for a living (like I do), you should follow this very closely. When the government takes a stake in a company, it becomes invested in that company’s success. It will protect it and support it, which is great for the other shareholders. You are no longer just betting on the company, you are betting alongside the most powerful institution on earth. And I believe that could lead to outsized returns. Look at Intel for example, if you had invested alongside the US government last August, every $1 you’d invested would be worth $6.5 now, just 10 months later!
Full transparency: a large part of my own portfolio is now in AI and AI-related companies. I have written about my shift out of crypto, and into AI and robotics. So when I say I think investors in these companies will do very well, understand that I am talking my own book and that I am not a neutral observer. I believe it because of where I think the world is going, and I have put my money where my mouth is.
The Intel deal is an early template. I expect we will see more of it, and I expect the companies that get government backing to be protected in ways that ordinary companies are not. If you are an investor, you have to pay attention to that.
The rest of the world, and Europe’s blind spot
Some countries are well positioned for this. Norway runs the largest sovereign wealth fund in the world, built on oil revenue and already heavily invested in global tech. Singapore has GIC and Temasek. The UAE has ADIA and Mubadala. These are exactly the vehicles you would want if your plan is to own a slice of the future and distribute the proceeds to citizens. If I were advising any of them, I would tell them to tilt hard toward AI and robotics, because that is where the value is going to concentrate.
And then there is Europe. I have written before about Mercedes and Stuttgart and the strange feeling of watching smart, serious people not see the wave that is about to hit them. The same blind spot applies here, at the level of an entire continent. Europe has almost no globally relevant AI companies. It does not have a large, AI-focused sovereign wealth fund. Worse, it does not even seem to be having this conversation. While the US debates how to give its citizens a stake in the AI economy, Europe is busy writing regulations for a technology it does not build.
Maybe “Europe is doing nothing” is too strong, because Norway is European, France has Bpifrance, and the EU has announced large AI investment initiatives. But none of that adds up to a large, AI-concentrated ownership vehicle of the kind Singapore could build tomorrow.
If many Europeans lose their jobs and there is no ownership stake, no dividend, and no plan, then a lot of people are going to face a future with no realistic path to a good life. That is dangerous: The conditions Vance described (mass disruption plus concentrated wealth plus no mechanism to share it) are exactly the conditions that produced the worst political movements of the last century. Europe will likely become more and more socialist over the coming years, exactly because of the widening wealth gap and because the government don’t see what is happening. You actually see some examples already, such as The Netherlands trying to implement a non-realised capital gains tax, and France talking about a wealth tax for rich people who want to move abroad.
There is still time to copy what the US is starting to do, and the playbook is not hard to copy. But I do not see Europe doing it, and that worries me for the people who live there.
Government ownership stakes seem to be the best idea
I am still uncomfortable, because government ownership of private companies cuts against everything I instinctively believe. But maybe my instinct is wrong here. We are heading into a world of abundance in production and scarcity in jobs, and that has to be managed or it will manage us.
Giving citizens an ownership stake in the companies driving the disruption is, I think, one of the better ideas on the table. Not because it is ideologically pure (it is not), and not because the dividend math fully closes (it does not), but because it aligns the public with the upside instead of leaving them to watch the gains concentrate somewhere they cannot reach. The US is ahead of the curve here. Most of the rest of the world, and Europe especially, is not.
As always, this is not investment advice and not policy advice. It is just how I am thinking about it right now, and I am very much still working it out. But I would rather be early to this conversation than late, because I have a strong feeling it is going to define the next decade.