Will Hutton continues to speak out about the a system of investment that has become increasingly orientated around a few large American corporations.
Tech billionaires have eroded the American dream. But voters are waking up
Trillion-dollar companies are masquerading as public companies while offering individuals unprecedented wealth and power over AI, space and democracy
On one issue American voters seem united: 89% of US adults believe government corruption is widespread. If the cost of living is the number one election issue in the US midterm elections this Tuesday, corruption has become number two – propelled there by accusations that President Trump and his sons have exploited his office to make billions for themselves.
Trump seems unfazed, and his family and allies push back. Thus the vice-president, JD Vance, pleads the president’s moderation, given the deals he is offered. Everything he does is in plain sight and within the law. He is doing no more than those at the apex of American capitalism, where successive founders of the wave of trillion-dollar tech companies have manipulated the American investment system to secure personal fortunes unparalleled in the history of humanity – all the while retaining control of their companies as if they were private domains. American voters know the score, goes the argument, and will rally to him at the last.
But will they? There are signs that what has worked for 30 years in delivering extraordinary economic dynamism has reached a tipping point – the dark side of incredible wealth and extreme private power overwhelming its advantages. For over the past three decades the locus of American economic activity has migrated from the realm of the publicly regulated stock market and public companies to private markets.
From the 1990s through the 2010s this new system married breathtaking technological innovation with wealthy individuals, families, foundations and the offshore rich, marshalled by new financial companies in growth equity and venture capital, ready to risk investment in this cornucopia of innovative tech businesses. The principal role of the public markets is no longer financing their growth but at the end of the process, when they are floated as “public companies” and ordinary joes are offered a chance to buy into them – and so create the tech bro billionaires.
The companies are not genuinely owned by a public of equal shareholders. In the main the founders carefully organise the shareholder structure, privileging their private shares with more votes, so they control the company even while they cash out to a disenfranchised proletariat of shareholders. In the process they become multibillionaires, and thus create the wherewithal to do it again, in a ferris wheel of permanent re-enrichment. Think Elon Musk, Larry Ellison, Peter Thiel. Private economic activity, together with these companies who masquerade as public, now constitutes nearly half of US GDP, while US wealth inequality surpasses the peaks of the Gilded Age of the late 19th century.
This privatisation of capitalism, as I have dubbed it, may have delivered extraordinary new companies and boons we value – the iPhone, the internet, the laptop, Google search, Facebook, reusable rockets and so much more. But now this system is transmuting into a menacing triffid that implies the privatisation of AI, of space, of the media and even of politics itself. US voters, watching the American dream evaporate in its wake, have begun to notice.
Last Monday, the seven founders of the AI company Anthropic announced plans to float their company for an estimated $1.5tn-$2tn – the largest initial public offering ever. They will split an estimated $150bn of the proceeds among themselves – not yet Musk-scale wealth, but the first step. On top they will own class-F common stock that is guaranteed to control 50.1% of the shares, while the poor mites stumping up the $1.5tn-$2tn will have a maximum of 49.9% of the votes in class-A common stock. The company, while nominally public, is thus in effect private.
As the founders explain in the explanatory papers, they will aim to deploy AI for the benefit of humanity, but there can be no guarantees and there is the possibility of catastrophic risk. To tilt the process in favour of humanity and fend off the threat of regulation, not only is Anthropic incorporated as a “public benefit corporation”, in addition it has established a long-term benefit trust run by disinterested trustees to ensure Anthropic sticks to its founding purpose “to ensure the world safely makes the transition through transformative AI”. It can appoint or remove directors if that is not happening.
In fairness to the founders, they have done more than most, and promise generous charitable donations. But for a technology as awesome as AI – its Claude Opus 5.5 is emerging as the frontrunner large language model (LLM) – it cannot be right that all that prevents potential abuse is a five-person long-term benefit trust. Especially as it is contractually reliant on Musk’s SpaceX for its data centres.
Last month, Musk announced that special committees are examining the case for merging Tesla and SpaceX, the biggest ever corporate merger, to create a $3.5tn company – whose raison d’etre would be to exploit AI in space, in robotics, in cars, on social media via X – and, via Anthropic’s commercial dependence on Musk, AI. Converting the class-B shares he holds in SpaceX with 10 votes per share to new shares in SpaceX-Tesla would mean he would control the giant new company personally. It is the privatisation of capitalism – and of AI – in neon, with Musk, already the world’s richest man and funder of extreme rightwing parties globally, our new arbiter.
At the end of last week there was a sell-off in tech stocks as Wall Street began to worry about the financial consequences. American voters are waking up to the political consequences. But so should we in Britain. We cannot surrender so much sovereignty over key aspects of our lives – from our burgeoning innovation economy to the accountability of AI – to American private interests with their own agendas. The government is soon to publish its 10-year plan. The imperative to react strategically has never been more real – or urgent.
"A couple might scrape together a combined private capital base of £240,000 provides only around £9,600 to £11,000 per year…