Bernie Sanders

When American progressives invoke Scandinavia, they almost always get it wrong.

Senator Bernie Sanders’ newAmerican AI Sovereign Wealth Fund Act, by which the federal government would forcibly own half of every major artificial intelligence company in the United States, is the latest example.

Like much of Sanders’advocacy promoting Nordic social welfare models, the senator omits what makes them financially possible with respect to private property, fiscal discipline and other basic tenets of capitalism. “Soaking the rich” and public ownership of productive companies are not features of Denmark, Norway, or Sweden.

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The idea of a “sovereign wealth fund” is not inherently bad. OpenAI’s Sam Altman has hinted at his preference for some form of public benefit tied to artificial intelligence revenues. Dario Amodei has said much the same. These funds can help mitigate potential future economic and social disruptions and ensure that future generations benefit from a major industry—Sanders cites both Norway’s and Alaska’s wealth funds linked to oil revenues as examples.

However, sovereign wealth funds are typically built by countries with budget surpluses and the ability to invest for future needs, which is challenging for the U.S., given that it runs persistent annual budget deficits and carries over $38 trillion in accumulated debt—with a debt-to-GDP ratio exceeding 100 percent.

It’s no secret that the United States has a prolific spending problem. A wealth fund built on tech revenues and lacking any limits on the government’s ability to spend it all is doomed to failure. Any pot of money becomes politically irresistible for elected officials, which is why Norway built restraints into law.

Getting this wrong means kneecapping all of America’s economic growth and global competitiveness in emerging technologies.

Even worse, Sanders is not even proposing the Norway or Alaska model, which banks profits for public benefit. He says the goal is to “create a sovereign wealth fund—not on the profits of OpenAI, Anthropic, xAI and other companies—but paid with something far more valuable than that: the stock.”

Sanders, if you can believe it, isproposing a mandatory equity transfer and seats on corporate boards for the federal government. Within Norway’s framework, the oil fund does not participate in the business decisions of the oil and gas industry, and it certainly does not claim "a direct ownership stake," which would become highly politicized.

In Sanders' vision, whoever wins the White House every four years would also be winning board seats at Anthropic.

This bears no relation to how the Alaska Permanent Fund is funded, or how Alaskans receive dividend checks. The state levies taxes—it is not a shareholder. Even with Intel, where the U.S. government dubiouslysecured a 10 percent passive ownership stake, it has no presence on the board. No one should underrate how radical Sanders’ proposal is.

It is also incredibly twisted for Sanders to fight for a 50 percent ownership stake in tech companies whose data centers he’s simultaneously trying to shut down. The AI boom and related infrastructure projects have arguably kept the U.S. economy from tipping into a full-blown recession. Imagine if Sanders got his wish on both the moratorium and a public takeover of these firms. Investment would vanish overnight.

Senator Sanders does not actually want the “Scandinavian” model for social welfare, as pointed out by Swedish author Johan Norberg, who has long criticized Bernie Sanders’ rhetoric confused here.

“Sweden learned in the 1970s. You can pick one: a big generous welfare state or you can make the rich pay for it all. You can’t have both,” says Norberg, "If you have a universal generous welfare state, and make the rich pay for it all, they will stop being rich. They will move. They will stop starting those businesses, the IKEAs of the future, and will move.”

Like clockwork, the people who end up being heavily taxed are the low and middle-class residents of cities and states that try to copy Sweden without any appreciation for their balanced relationship to business or financial discipline.

Sanders' AI takeover scheme deserves to be rejected and left behind, along with the 1970s Soviet imagination that cooked it up in the first place.

Egle Markeviciute is the Head of Digital & Innovation Policy at the Consumer Choice Center. She previously served as a Deputy Minister at the Ministry of Economy & Innovation of Lithuania.

Stephen Kent is the Media Director for the Consumer Choice Center, based in Washington, D.C.