Giving Workers a Stake in A.I. Gains Traction
Gov. Gavin Newsom of California has floated a policy idea that’s getting attention in Silicon Valley: let workers own a piece of technology disruption.
You’re reading the DealBook newsletter. The most crucial business and policy news you need to know from Andrew Ross Sorkin and team.
Andrew here. President Trump has pulled back on his executive order to oversee new artificial intelligence models. Behind the scenes, several tech leaders have been campaigning against the plan, arguing that it will slow innovation. That’s as others, like Anthropic, have voluntarily previewed their models with Washington.
Elon Musk, Mark Zuckerberg and David Sacks, the former White House A.I. czar, have reportedly weighed in against the executive order. Given the national security concerns these frontier models present, the question is whether the industry can police itself. Please let me know what you think.
Giving workers a stake in the A.I. that laid them off
Anxiety over what artificial intelligence will do to the labor force shows no sign of receding, amid broad layoffs and the promise of more across nearly every sector.
Elected officials have been rushing to devise ways to deal with the fallout of the A.I. boom. A first-in-the-nation directive by Gov. Gavin Newsom of California on Thursday puts the spotlight on a potential solution that has been gaining traction in policy circles and Silicon Valley alike: giving workers a share of the disruption.
Newsom’s order directs California officials to study universal basic capital, or U.B.C., alongside more traditional moves like expanding job training for white-collar workers and others likely to be displaced by A.I.
“You cannot save democracy unless we democratize the economy,” he said in a speech on Tuesday, before Thursday’s announcement. “The whole system has to be reimagined.”
It’s a spin on universal basic income, or U.B.I., in which governments pay citizens set amounts of cash, an idea attractive to those who worry about widespread A.I. layoffs.
U.B.I. systems have been tested around the world, and a version was touted by Andrew Yang in his 2020 presidential run. (Elon Musk remains a fan.) But research has raised questions about whether they work.
Enter U.B.C. Proponents say that U.B.C. offers people more compensation for the disruption that A.I. will create.
In April, OpenAI — whose C.E.O., Sam Altman, previously backed U.B.I. — published a policy framework that proposes the creation of a “public wealth fund,” financed by tech companies, that gives all citizens, including those who don’t otherwise own stocks, “a stake in A.I.-driven economic growth.”
As A.I. businesses grow, the thinking goes, people would get a proportionate share of their profits via their holdings in the fund.
(The underlying principle behind U.B.C. — broadening stock ownership — has been gaining traction, too. We previously reported that the Treasury Department is weighing whether to allow the donation of individual stocks to so-called Trump accounts.)
But skeptics have concerns about U.B.C. It’s unclear whether people could sell their stakes in the kind of wealth fund that OpenAI has proposed — and allowing such transactions risks wealthy investors getting wealthier by buying out the holdings of those who want a quick payout.
And then there’s the question of whether U.B.C. only further entrenches the power and longevity of A.I. giants. “If I own OpenAI shares that I can never sell, we just made OpenAI last forever, whereas maybe I want to be able to sell my shares to buy Anthropic,” Betsey Stevenson, a former top Labor Department economist in the Obama administration, told Politico last month.
She added, “The need for competition to make everything work efficiently doesn’t go away because of A.I.”
HERE’S WHAT’S HAPPENING
Oil prices rise as peace talks between the U.S. and Iran stumble. Traders are again on edge as disagreements remain over Tehran’s uranium stockpile and a report that Iran is weighing imposing a toll on the Strait of Hormuz to gain greater control of the vital trade route. Brent crude, the international benchmark for oil, traded around $106 a barrel.
The Pentagon is reportedly testing rivals to Anthropic’s Claude artificial intelligence model. The Defense Department’s trial involves input from a core of the agency’s “power users,” Bloomberg reports, citing an unnamed source. The trial began in March shortly after Defense Secretary Pete Hegseth declared Anthropic a supply-chain risk, a move that the company is trying to stop in court.
The quantum computing sector rallies, with help from the Trump administration. Shares in companies involved in quantum computing rose after the Commerce Department announced that it would provide them with a combined $2 billion in funding, and take equity stakes in them, part of a wider strategy to support businesses involved in industries deemed critical. The government now has equity stakes in more than 20 private companies.
SpaceX I.P.O. winners and losers
Investors continue to pore over SpaceX’s voluminous I.P.O. prospectus, as bulls and doubters brace for what could be the biggest public market debut ever.
As Elon Musk’s space and artificial intelligence company seeks to raise up to $75 billion from the offering, it could mint some big winners.
They include:
Musk. The world’s richest man owns nearly 850 million Class A shares, and 5.6 billion Class B shares, giving him 85 percent of the shareholder vote. The company values itself at $1.25 trillion, making his stake worth more than $635 billion.
Goldman Sachs. It secured the lead underwriter position — known on Wall Street as “lead left” because of its position on the prospectus — beating out its longtime rival, Morgan Stanley. That could let it collect the biggest share of what’s expected to be more than $1 billion in commissions and associated fees.
Cursor. The A.I. coding software firm, whose business is increasingly under threat by OpenAI and Anthropic, is in line to be acquired by SpaceX at a lofty $60 billion valuation — in stock, which could be more valuable if the offering goes well.
Early investors, including Google, the hedge funds D1 Capital and Darsana Capital Partners, and Washington University in St. Louis. Scott Wilson, the school’s chief investment manager, invested roughly $50 million in SpaceX a decade ago, a stake that’s worth over $1 billion today.
The space sector. On Wednesday, Jeff Bezos told Andrew that he was seeking outside funding to help grow Blue Origin, his rocket start-up.
The verdict is still out on:
Morgan Stanley and its star banker, Michael Grimes. The bank’s second-banana billing is a blow to Grimes, a longtime ally of Musk whose return to Morgan Stanley was meant to help the bank score the lead-left position. (That said, its role as stabilization agent — ensuring SpaceX shares trade smoothly post-I.P.O. — could also net big fees.)
Tesla. Shares in Musk’s electric vehicle company have slumped this year, as shareholders worry about Musk running another publicly traded company. “It feels like SpaceX is his new baby at the expense of Tesla,” Joe Gilbert, a portfolio manager at Integrity Asset Management, said this week.
Also worth watching: A bloc of shares will be sold directly to retail investors through trading platforms including Charles Schwab, Fidelity and Robinhood. That’s getting plenty of attention on online investor forums — but risks individual investors piling into a vertiginously valued stock.
In other I.P.O. news: Oura, the maker of the popular fitness tracker rings, and Blockchain.com, a crypto brokerage, have reportedly filed confidentially to go public.
Headwinds for the travel business
The summer travel season unofficially kicks off this weekend amid huge uncertainty. The war with Iran has disrupted oil supplies and spiked gasoline and jet fuel prices, making both road trips and flights more expensive, and driving cancellations that are weighing on the industry.
Sarah Kessler spoke with Michelle Meyer, the chief economist at the Mastercard Economics Institute, about three big questions the sector faces.
Will high gas prices keep Americans at home? Perhaps not. The Transportation Security Administration said this week that it expected to screen around 18.3 million passengers over Memorial Day weekend, up slightly from last year. And AAA forecasts 45 million people will travel at least 50 miles from home over the weekend, also a slight increase from last year.
Cost-conscious consumers are more likely to shift travel plans than forgo it altogether. “It’s not if people will travel,” she said. “It is how they will travel.”
Will war in the Middle East change business travel patterns? In a recent report, the Mastercard Economics Institute looked at how airlines’ scheduled capacity to international destinations between June and September compared with the same period in the previous year. Paris had the largest planned increase of incoming international air travelers; Abu Dhabi, a major business travel hub, came in sixth.
But war has forced airlines to cancel thousands of flights to the region, or reduce service. It’s unclear how quickly that will reverse if a peace deal is reached.
How are recommendations by artificial intelligence changing tourism? Mastercard looked at the travel spending habits of its customers with subscriptions to an A.I. service. They tended to budget more for travel, and appear to favor “off-the-beaten-track” destinations like Leipzig, Germany; Carcassonne, France; and Orvieto, Italy.
Number of the day: $850 million
That’s how much an Iranian financier reportedly funneled through a secret payment network on the cryptocurrency exchange Binance to help fund Tehran’s military, according to The Wall Street Journal.
Binance and its founder, Changpeng Zhao, have had a rocky history with the U.S. In 2023, the company and Zhao admitted to violating anti-money-laundering laws and breaching U.S. sanctions on Iran. (President Trump pardoned Zhao last year.) In March, The Times reported that accounts on the exchange had moved $1.7 billion to Iran-linked entities.
Iran’s reliance on crypto has become a major worry on Capitol Hill, and threatens to derail the Clarity Act, a major crypto bill that the White House supports.
Talking A.I. with the C.E.O. of Zendesk
Every week, we’re asking a leader how he or she uses artificial intelligence. This week, Tom Eggemeier, who leads the customer service technology company Zendesk, told Sarah Kessler that he thinks about 80 percent of customer service interactions will soon be handled by A.I. agents. The interview has been condensed and edited for clarity.
How do you personally use A.I.?
I spent about two months with my 21-year-old son, who’s a walk-on college basketball player, and we created an application for college basketball transfer portals on what the expected value and expected impact of a potential transfer player was. I had no coding experience before that.
And then I used Claude to launch a feature for Zendesk that’s in our software code now. We just launched it last week.
How did you start using A.I. in the company?
We knew when OpenAI and Anthropic launched their models that this was going to disrupt customer service. And so we made seven acquisitions of A.I. companies in about two years.
It’s a rallying cry within the organization that we need to disrupt ourselves or someone is going to disrupt us.
Do you think most companies can handle all their customer service with A.I.?
We think within about three and a half years, 80 percent of customer service interactions will be handled by A.I. agents.
Once the barriers are down, interactions go up. We have a lot of companies that are handling 70, 80, 90 percent of interactions with A.I. agents.
THE SPEED READ
Deals
Estée Lauder ended acquisition talks with Puig, the Spanish perfume company, nixing for now a plan to create a rival to L’Oreal. (Reuters)
LIV Golf has reportedly offered its players equity and is looking to raise $350 million as it scrambles for new funding. (FT)
Politics, policy and regulation
Meta settled a lawsuit with a Kentucky school district over claims it harmed youth mental health, heading off the first of over 1,200 suits brought by schools against social media companies. (WSJ)
Senators are preparing a bill to limit Treasury Secretary Scott Bessent’s use of the $219 billion Exchange Stabilization Fund to support foreign allies of the Trump administration. (FT)
Best of the rest
JPMorgan Chase is locked in a battle for control of 8.2 million comics, graphic novels, figurines and tabletop games locked in a Mississippi warehouse. (Bloomberg)
Would sprinkling in a few typos prove you’re human? (The Atlantic)
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Andrew Ross Sorkin is a columnist and the founder of DealBook, the flagship business and policy newsletter at The Times and an annual conference.
Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets.
Niko Gallogly is a Times reporter, covering business for the DealBook newsletter.
Brian O'Keefe is the managing editor of DealBook, a newsletter from The New York Times that covers business, policy and culture — and the many ways they overlap.