Musk Claps Back At Bernie Sanders Over Massive ‘AI’ Tax Proposal

Millions of Americans may now hold an indirect financial stake in Elon Musk’s SpaceX through retirement accounts after the rocket and satellite company joined the Nasdaq-100 following its record-breaking public offering.

Yet as workers and investors gain exposure to the company’s growth, socialist Vermont Sen. Bernie Sanders is advancing a plan that would force America’s largest artificial-intelligence companies to surrender half of their equity to the federal government.

Sanders introduced legislation in June to create what he calls the American AI Sovereign Wealth Fund.

Under his proposal, qualifying AI companies would be subjected to a one-time tax equal to 50% of their equity. Instead of paying the levy in cash, the businesses would transfer company stock into a government-controlled investment fund.

The fund would be administered by a seven-member commission and could initially hold approximately $7 trillion in assets, according to Sanders’ estimate.

Companies would become subject to the policy once their annual AI-related revenue reached $200 million.

Sanders argues that Americans should receive a direct share of the economic value created by artificial intelligence instead of allowing ownership to remain concentrated among technology entrepreneurs and investors.

His proposal calls for distributing 5% of the fund’s value every year through direct payments and government spending on health care, education and housing.

Sanders used Musk’s own social media platform to criticize the billionaire’s wealth.

“One man (Mr. Musk) owns more wealth than the bottom half of American households,” Sanders wrote on X.

“Meanwhile, 60% of Americans live paycheck to paycheck, nearly 800,000 are homeless and 85 million are uninsured,” he added. “We can do better. We must do better.”

Sanders presents the proposal as a way to spread the benefits of technological progress. Critics, however, see a sweeping government confiscation scheme that would weaken private-property rights, discourage innovation and place enormous corporate ownership stakes under political control.

Socialism has repeatedly promised prosperity through redistribution, yet its central-planning model has produced economic stagnation and diminished individual freedom wherever it has been imposed most aggressively.

Musk has also challenged the premise behind attacks on his net worth. He argues that most of his fortune is not sitting in cash but is tied to his ownership of companies such as SpaceX and Tesla.

That distinction has become even more significant now that SpaceX is publicly traded. Musk’s paper wealth fluctuates with the market value of businesses whose shares may also be held by retirement funds, institutional investors and ordinary Americans.

“I have stock in SpaceX and Tesla, not some big pile of cash,” Musk wrote on X in response to Sanders.

“As my companies do more and more useful things, their value increases proportionate to their projected usefulness. All shareholders benefit along the way, including most retirement programs,” he added.

SpaceX began public trading under the ticker SPCX on June 12 after setting its initial public offering price at $135 per share.

The company ultimately sold nearly 639 million shares, including an option exercised by underwriters, and raised approximately $85.7 billion. Nasdaq described it as the largest IPO in history.

Less than one month later, Nasdaq announced that SpaceX would enter the Nasdaq-100 Index effective July 7.

The index follows 100 of the largest nonfinancial companies listed on Nasdaq. More than 200 investment products with over $800 billion in combined assets track the benchmark.

As a result, Americans invested in Nasdaq-100 funds may now own SpaceX shares without having purchased the company individually.

Exchange-traded funds such as Invesco QQQ and QQQM are structured to track the Nasdaq-100 and must adjust their portfolios when the index adds or removes a company.

Some 401(k) and target-date retirement funds may also provide SpaceX exposure when their underlying investments include Nasdaq-100 products.

That does not mean every American retirement account now owns the company. Someone invested exclusively in an S&P 500 index fund, for example, would not automatically acquire direct SpaceX exposure merely because the company joined the Nasdaq-100.

Investors must review their specific funds, benchmarks and portfolio holdings to determine whether SpaceX is included.

The company’s arrival in retirement portfolios underscores the wider impact of Musk’s enterprises. When businesses such as SpaceX grow, the resulting wealth does not necessarily benefit only their founders. It can also flow to workers, pension plans and individual investors who own shares through the public market.

The political divide could hardly be clearer. Sanders and his progressive allies view concentrated private wealth as something government should seize and redistribute. Conservatives argue that America should protect property rights, reward risk-taking and expand opportunities for citizens to participate in economic growth.

Musk’s fortune was created largely through ownership of companies whose value depends on whether they continue producing useful technology. Sanders’ answer is to transfer half of that ownership to Washington.

That is not free-market capitalism. It is government acquisition of private industry on a historic scale—with potentially serious consequences for innovation, investment and the retirement savings of ordinary Americans.