By Teresa Rivas
There a few things that people across the political aisle can agree on, but the government being involved in artificial intelligence is one of them. That's a good thing for the technology, Jefferies says.
AI has been the major engine behind the recent stock rally: The 10 biggest stocks in the S&P 500 are all big tech companies, and the tech-heavy Nasdaq Composite is more than 10% so far this year, the best-performing of the big three indexes.
Tech companies will spend as much as one trillion dollars on AI development next year, and expected productivity gains have helped push up shares of perceived AI winners. The providers of "picks and shovels" plays like Nvidia and other chip stocks are benefiting, too: The iShares Semiconductor exchange-traded fund had its best day in over a year on Monday, and is up more than 90% since the start of 2026 (though the ETF did struggle on Tuesday, falling some 4%).
Not surprisingly, the U.S. government wants a piece of the action. It already took a stake in Intel and other companies, so an equity stake in AI companies could follow -- an idea proposed in 2025 by Sam Altman, the head of ChatGPT owner OpenAI. He wanted to donate shares to a public wealth fund, and discussed the idea with the White House, while prominent Democratic Sen. Bernie Sanders proposed a similar sovereign-wealth fund composed of taxes paid in the form of stock from major AI companies.
Aniket Shah, Jefferies' head of sustainability and transition strategy, says the ties between AI and Washington, D.C. will only get stronger. He cites the June 2 executive order that lays out a (voluntary) framework for the government to review frontier AI models before they're released, and the Great American AI Act, a bill spearheaded by a Democrat and a Republican that would cover AI safety and research and development.
Some investors may be concerned that government involvement could slow or stifle innovation and development. Shah admits that Uncle Sam could contribute to volatility, as markets try to handicap these potential worries.
Nonetheless, he says it's an overall net positive for AI companies.
"A government stake can signal alignment with national priorities and creates a dynamic where Washington shares in the downside risk," Shah writes. "Companies' demonstrated regard for public welfare can also benefit their reputation."
The latter could provide a much-needed publicity makeover amid people's general skepticism of the technology.
In addition, while AI boosters have emphasized how revolutionary it is, government involvement could prove to be reassuringly grounding.
"Its deployment will be gradual and its most extreme applications constrained by regulators, legislators, and public sentiment," he says. "Regulatory clarity -- even if it slows the frontier -- can be positive for the industry by establishing durable rules of the road, reducing tail risks, and broadening public acceptance."
Just don't trust AI to do your taxes just yet.
Write to Teresa Rivas at teresa.rivas@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 09, 2026 16:03 ET (20:03 GMT)
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