OpenAI’s Reported Offer Of 5 Percent Gift To The Public Purse Is Anything But

These proposals should be viewed with extreme caution

Whether a reported 5% of OpenAI is a potential gift to the American people, or Sam Altman trying to hedge against the AI infrastructure bubble collapsing, is a question more people should ask.

OpenAI is reportedly discussing ‘giving’ the U.S. government a 5% stake in the company, according to a report in The Financial Times, citing two people familiar with what were described as “early conversations.”

This gift, based on OpenAI’s current estimated valuation, would be worth around $42.6 billion.

The Trump administration’s views of the deal are, yet, unknown but trying to discern the views of this government - based on its chaotic track record with tech regulation - is virtually impossible. Trump has been through multiple cycles of export ban on chips, and most recently the Anthropic models Fable and Mythos. In June, the U.S. president scrapped an executive order on AI regulation hours before it was due to be signed.

According to OpenAI’s CEO Sam Altman, the deal would allow the public a share of the wealth generated by AI, presumably to try and neutralize some of the pushback against AI coming from the public in general but also environmental groups, trade unions and large sections of the media.

According to the FT, the proposal would also involve other US AI companies such as Anthropic as well as the hyperscalers giving a similar stake to the government. It is not clear yet whether these companies are on board with that idea, and OpenAI has yet to comment on these reports.

Earlier this year, OpenAI said that a “public wealth fund” could provide “every citizen – including those not invested in financial markets – with a stake in AI-driven economic growth”.

Let Them Eat Datacenters

In one sense, it’s not hard to understand why AI companies might feel they need to perform some sort of wealth redistribution theatre. AI, and Big Tech more broadly, does not enjoy good approval ratings. The companies behind it clearly find it irksome when they have to water down or cancel datacenter proposals; explain themselves in court or Congress to parents or young people who have suffered harms incubated on the platforms they created; to creatives whose work they took without permission; or to people living near datacenters who have found their groundwater supplies drained or air polluted by off-grid methane-powered generators.

These are not people who like to explain themselves or hear the word, “no.”

But whilst both Sam Altman and Satya Nadella have mused publicly on AI’s PR problem, and the implications of a lack of public consent, it’s hard to view these proposals as anything more than a breathtakingly cynical attempt to try and bribe the public to accept the impact of a technology that – according to research – it broadly doesn’t want and didn’t ask for.

It’s not even a worthy bribe. Five percent of OpenAI really won’t go very far with an American public already aware that the serious financial gains from this technology will be felt by a vanishingly few already-wealthy individuals, particularly after the Trump administration has taken its cut.

Offering 5% of OpenAI makes Sam Altman look like some sort of digital Marie Antoinette, offering a few crumbs in return for a lifetime of grinding job insecurity and more expensive utilities.

Who’s Left Holding The Bag?

There’s also the question of what those crumbs are going to be worth a few years down the line. OpenAI and Anthropic have grown user numbers impressively, but only by effectively subsidizing their products. Oracle has recently issued a warning in its annual report that the gamble it has taken to build AI infrastructure, mainly for OpenAI, to meet “anticipated demand” may not pay off as soon as it may have hoped.

If OpenAI and Anthropic struggle to pay their bills with the hyperscalers (and to do so they will have to become profitable – a basic goal of enterprise that has so far eluded both companies) then some investors are losing shirts.

There are signs, not of a run on tech stocks, but of something that might faintly resemble a reality check in markets of late. Viewed though a glass darkly, Sam Altman proffering 5% of a company which is not only hugely indebted, but according to its own CFO, not yet able to withstand the scrutiny of an IPO, looks less like a gift and more like an attempt to position itself for a bailout when investors finally run out of patience.

This article originally appeared on MES Computing’s sister site Computing.