Bloomberg Warns Trump AI Ownership Plan Would Foster Cronyism

Michael Bloomberg has strongly criticized a proposal reportedly being considered by former President Donald Trump that would involve the government taking a stake in artificial intelligence companies. In an opinion column published in Bloomberg Opinion on Monday, Bloomberg argued that such a move would transform Washington from an industry regulator into an investor driven by profit incentives, a scenario he believes would foster "cronyism."

Bloomberg drew parallels to centrally planned economies and dystopian literature, stating that "Somewhere, Karl Marx is smiling" at the prospect of a state-controlled economic model for AI, and that the potential for propaganda would "make George Orwell blush." He contended that government ownership of AI companies is not necessary for the public to benefit from the technology's advancements. Bloomberg suggested that Americans can already share in AI's gains by purchasing stock once companies go public. Furthermore, he highlighted existing public benefits derived from AI applications in areas such as fraud detection, medical research, and bookkeeping, as well as the potential for economic growth to increase tax revenue for public services.

Instead of government investment, Bloomberg proposed that if AI companies are not contributing sufficiently to the public good, the focus should be on reforming the tax code to better serve public interests. He predicted that federal shareholders in AI companies would likely lead to corruption, as the market would be influenced by government interests rather than pure competition and innovation. The current model for AI development in the U.S. involves private investors financing breakthroughs, with companies initially owning the benefits before distributing them to public markets, while the government acts as a regulator. This contrasts with China's approach, where companies compete for investment and customers, and the government provides compute resources. Bloomberg's critique suggests a fundamental disagreement on the role of government in the burgeoning AI sector.