Bridgewater Associates Advocates for 'Citizen Equity' in AI Debate, Proposing 'Token Tax'

Hedge fund titan Bridgewater Associates has emerged as an advocate for ordinary Americans in the artificial intelligence debate, urging policymakers to address the potential risks of AI and ensure the widespread distribution of wealth generated by the technology.

The firm, founded by billionaire Ray Dalio, has engaged in discussions with policymakers from both major parties regarding proposals to prevent an AI-driven job displacement crisis. Bridgewater's chief investment officer, Greg Jensen, CEO Nir Bar Dea, and other leaders recently published an essay calling for "immediate policy action" to harness AI's potential while mitigating risks of societal disruption and safety failures.

These proposals have garnered attention on Capitol Hill, leading to informal talks about establishing "citizen equity" in the AI boom, according to a source. A key proposal from Bridgewater is a "token tax" on AI usage. The firm estimates that a 35% tax could generate $600 billion by 2030, with revenues used to acquire shares in AI companies and distribute them to the public.

This approach contrasts with the universal basic income (UBI) proposals favored by figures like OpenAI CEO Sam Altman and Elon Musk. Jensen expressed concern that UBI grants too much power to the government, stating, "You're still dependent on a bureaucrat deciding how much and when you get your check." He argued that distributing equity directly to citizens would empower them and remove political control over these funds.

Jensen and Bar Dea emphasized the urgency of their proposals, noting that as AI diffusion accelerates and models become more autonomous, mitigating negative consequences will become increasingly difficult. The potential for AI to substitute for human labor, while human workers remain subject to payroll taxes, is a central concern.

Bridgewater suggests that proceeds from a token tax could offset taxes on human workers and aid those displaced by AI. "I think it just is common sense that we don’t want to incentivize machine labor over human labor," Jensen said in an internal Q&A, advocating for a dedicated IRS division to enforce such a tax.

Jensen also proposed heightened oversight for AI giants controlling significant computing power, drawing parallels to the scrutiny applied to major financial institutions. He questioned the societal acceptance of a single entity controlling a substantial portion of global AI compute, stating, "Would we let one entity control that much of some other form of energy or commodity?"

Bridgewater acknowledged that they would be "disproportionately subject to the taxes and regulations we recommend," asserting their promotion of these policies is for the long-term benefit of AI's integration into society.

The firm also called for a more active government role in AI safety regulation, suggesting regular, sworn interviews of AI lab staff regarding safety risks and mitigation efforts. However, some experts express caution. Jeremy Bearer-Friend, an associate law professor at George Washington University, lauded the idea of public equity in AI for its potential to enhance public safety and provide a public voice in corporate governance. He also cautioned against increased public funding for AI companies through mandatory government share purchases.

Cyril Gorlla, CEO of AI startup CTGT, believes Bridgewater's proposals could foster confidence in AI, thereby stimulating industry growth. However, he noted the practical challenges of implementing a token tax, particularly the absence of a universal metering standard for AI services, unlike traditional utilities.