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OpenAI’s Proposed “Industrial Policy”

OpenAI’s Proposed “Industrial Policy”

Last updated on: April 16, 2026 at 6:00 am by Gene Veith

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OpenAI’s Proposed “Industrial Policy” 2026-04-12T14:56:55-04:00 Gene Veith

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AI is poised to change our economy, our society, our government, and our way of life. What those changes will be, whether they will be good or bad, and whether the public wants them are open questions. But we are forging ahead with AI anyway.

At the very least, such an impending upheaval requires reflection and planning. Sam Altman, CEO of OpenAI whose release of ChatGPT ignited the AI revolution, has issued a position paper designed to forward–and direct–that discussion entitled Industrial Policy for the Intelligence Age: Ideas to Keep People First. Here is part of the opening:

In just a few years, AI has progressed from systems capable of fast, narrow tasks to models that can perform general tasks people used to need hours to do. Now, we’re beginning a transition toward superintelligence: AI systems capable of outperforming the smartest humans even when they are assisted by AI. No one knows exactly how this transition will unfold. At OpenAI, we believe we should navigate it through a democratic process that gives people real power to shape the AI future they want, and prepare for a range of possible outcomes while building the capacity to adapt. That’s what this document is for—to start a conversation about governing advanced AI in ways that keep people first.

The document is filled with noble sentiments, expressing a commitment to “democracy” and the good of the “people,” as well as policy proposals that will protect and advance the AI industry.

Mike Allen and Jim VandeHei discuss the paper for Axios in an article entitled Behind the Curtain: Sam’s superintelligence New Deal. Here is their summary of the highlights:

(1) A Public Wealth Fund. OpenAI proposes giving every American citizen a direct stake in AI-driven economic growth through a nationally managed fund, seeded in part by AI companies themselves, that “could invest in diversified, long-term assets that capture growth in both AI companies and the broader set of firms adopting and deploying AI.” This is the most radical idea in the document.

(2) Robot taxes. The document floats “taxes related to automated labor,” and shifting the tax base from payroll toward capital gains and corporate income — since AI could hollow out the wage-and-payroll revenue that funds Social Security, Medicaid and SNAP.

(3) A four-day workweek. OpenAI suggests incentivizing companies and unions to run pilots of 32-hour workweeks at full pay, converting AI-driven efficiency to time back for workers — an “efficiency dividend.”

(4) “Right to AI.” The plan frames AI access as being as foundational as literacy, electricity and internet — and says access should be affordable for workers, small businesses, schools, libraries and underserved communities.

(5) Containment playbooks for rogue AI. In the most chilling passage, OpenAI acknowledges scenarios where dangerous AI systems “cannot be easily recalled” because they’re autonomous and capable of replicating themselves. Their answer: coordination that includes government.

(6) Auto-triggering safety net. The blueprint envisions tripwires tied to economic data. When AI displacement metrics hit preset thresholds, temporary increases in public support — unemployment benefits, wage insurance, cash assistance — automatically kick in. When conditions stabilize, the measures phase out.

Sound good? But the heart of the matter is that Sam Altman and OpenAI are proposing, in the words of the title of their paper, an “Industrial Policy.” The assumption is that free market capitalism is not sufficient, or that it somehow is inadequate to this new industry.

Industrial policy is proactive government-led encouragement and development of specific strategic industries for the growth of all or part of the economy, especially in absence of sufficient private sector investments and participation. . . .

Industrial policies are interventionist measures typical of mixed economy countries.

A mixed economy is defined as “an economic system that includes both elements associated with capitalism, such as private businesses, and with socialism, such as nationalized government services.”

As that Wikipedia entry explains, this hybrid of private businesses and a government-controlled economy is characteristic of Fascist economics as well as that of today’s Chinese communism. Also Democratic Socialism, European-style “social democracy” welfare states, and Keynsian liberal economics.

The OpenAI document has some kind words for capitalism, as one would expect, since so-far the free-market has made tech entrepreneurs billionaires. But it goes on to say that “market forces alone aren’t sufficient” for this new industry:

In normal times, the case for letting markets work on their own is strong. Historically, competition, entrepreneurship, and open economic participation have lifted living standards and expanded opportunity. Capitalism, imperfect as it is, remains an effective system for translating human ingenuity into shared prosperity.

But industrial policy can play an important role when market forces alone aren’t sufficient—when new technologies create opportunities and risks that existing institutions aren’t equipped to manage. It can help translate scientific breakthroughs into scaled industries and broad-based economic growth.

“Existing institutions” aren’t equipped to handle this new technology, so the existing institutions need to change, which means the government must change them.

Here is what OpenAI wants the government, as well as nongovernmental institutions, to do:

A new industrial policy agenda should use government’s existing toolbox for aligning public and private activities: research funding, workforce development, market-shaping tools, and targeted regulation. But governments should not act alone. Nongovernmental institutions should pilot new approaches, measure what works, and iterate quickly, then governments should reinforce successes by aligning incentives and scaling what works through procurement, regulation, and investment. This public-private collaboration should stave off regulatory capture and centralized control, instead preserving the freedom to innovate while ensuring that the onset of superintelligence isn’t dominated by the most powerful forces in society.

The government is to align public and private activities. Provide research funding. Develop the workplace. Shape the market. Have “targeted” regulation, but not “regulatory capture” of the AI industry, ensuring its “freedom.”

The document piously says that the proposed industrial policy must make sure that “superintelligence isn’t dominated by the most powerful forces in society.” Well, that would be the tech lords who are developing “superintelligence” and the government that they are enlisting into their service.

If the tech lords really wanted “a democratic process that gives people real power to shape the AI future they want,” they should embrace a free market approach to the new technology. Free markets are governed by supply and demand. If the people do not “demand” a product, the supply will either wither away or take a different form that conforms to what people demand. If a new technology does not attract enough investment, due to investors not seeing a sufficient profit relative to the development costs, that technology will not flourish or will be taken in a different direction. Under the free market, consumers and investors could say “no” to AI, or “yes” to a much more modest version that helps them rather than hurts them.

Industrial policy uses the government to push through the product no matter what. That requires a powerful, controlling central government that tells people what to do, rather than respecting their free choices.

Republicans used to be the champions of the free market, with Democrats wanting a government-controlled economy. According to the Wikipedia article on Industrial Policy, “In the US, an industrial policy was explicitly presented for the first time by the Jimmy Carter administration in August 1980, but it was subsequently dismantled with the election of Ronald Reagan the following year.”

Today, though, both the Trump administration and its Democratic critics, for all their hostility, agree that the government should control the economy. Democrats tend to want that control to limit what companies–not just AI companies–will be allowed to do. Today’s Republicans tend to be in favor of industrial policy that takes the form of a “partnership” between corporations and the government.

“The bottom line” to the “AI New Deal” proposal, according to the Axios article, is this: “The man betting everything on superintelligence is telling the world that this thing is coming so fast, and so hard, that capitalism as we know it won’t be enough. Whether you believe the altruism or see the strategy, the admission alone is historic — and worth deep reflection.”

Illustration via EMediaAI, CC by 4.0

free market economics

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Open AI's "Industrial Policy for the Intelligence Age"

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