The greatest challenge for the current bull market in AI stocks could be a downturn in public sentiment towards artificial intelligence. A Quinnipiac University poll reveals that 70% of Americans believe AI will decrease job opportunities, an increase from 56% a year prior. This aligns with a Marquette University Law School survey showing 70% of adults view AI as harmful to society. Even the Pope is advocating for regulations to control the rapid development of AI.
Sam Altman from OpenAI and Dario Amodei from Anthropic, as they prepare for billion-dollar stock market listings, have recognized the signs. They are part of a collection of financial and technology executives aiming for the government to begin tackling the possible consequences of AI before public opinion shifts.
A slight increase in unemployment might elevate concerns about AI into a significant political topic as the upcoming presidential election starts. This could bring about major changes in AI policy before the technology's effects are fully understood. Such developments could endanger the current surge in AI stock values and America's position as a leader in the most substantial technological advancement of the past few decades.
"Even though AI isn't currently voters' primary focus, it is the issue that is growing the most rapidly," stated Aniket Shah and his team from Jefferies' Washington Strategy group in April.
Suggestions are already emerging. They include significantly increasing government funding to expand a robust safety net, as well as changing the tax burden from workers to machines. A tax on tokens that AI systems handle could change the financial dynamics fueling the data center expansion, which is pushing stock markets to record levels.
Senator Bernie Sanders, from Vermont, and Representative Alexandria Ocasio-Cortez, from New York, collaborated in March on a bill to suspend the creation of new data centers. However, AI is not solely a concern for the far left. Steve Bannon, the conservative figure who played a key role in President Donald Trump's 2016 election, placed AI's effect on jobs and families "among the top issues, alongside immigration." He mentioned at a Semafor conference in April that "people are very concerned about this."
Musk and Altman Support a Broader Safety Net
Populists appear to view AI as a political replacement for free trade, positioning workers against Wall Street and tech giants. However, Tesla's Elon Musk,JPMorgan'sJPM's Jamie Dimon, Anthropic's Dario, and OpenAI's Altman are also advocating for significant reforms. Their goal is to prevent a populist reaction by distributing the benefits of AI more widely.
In 2020, Altman supported a three-year universal basic income, or UBI, trial that provided low-income adults with $1,000 each month to see if it would reduce the desire to work. The employment rate was 2% lower compared to the control group, yet participants were more inclined to look for jobs, engage in job training, or launch a business.
But why limit it to $1,000 per month?TeslaTSLA and SpaceX's CEO, Musk, shared on X in April that "Universal High Income through checks provided by the federal government is the most effective approach to address unemployment resulting from AI." The "remarkable surplus" made possible by AI and robotics "will allow everyone to own a penthouse if they desire."
Even if something similar to Musk's vision could be achieved, there is no clear plan for society—or the federal government's support system—to facilitate the transition.
Altman mentioned to The Atlantic during a recent conversation that a fixed cash payment, "while potentially beneficial and perhaps a positive approach in certain aspects, doesn't address what we truly require during this stage."
I'm far more focused on approaches that involve considering collective ownership," Altman stated. "Everyone needs to be involved in the benefits.
OpenAI: Enable Employees to Benefit from AI Success
OpenAI has recently suggested that the government encourage businesses to offer "efficiency dividends," such as reducing the workweek to four days without any reduction in salary. The developer of ChatGPT also supports the idea of a U.S. public wealth fund that distributes AI-related dividends, ensuring that all citizens benefit from the economic gains of artificial intelligence.
However, OpenAI, recognizing the danger of "jobs and entire industries being affected," states that widespread prosperity will need a support system that's "adaptable to the challenges individuals will encounter during the shift." This, in turn, will necessitate updating the tax system. Otherwise, the effects of AI on employment could endanger Medicare and Social Security, which are supported by income and payroll taxes.
"Policymakers might adjust the tax system by boosting dependence on income derived from capital — like imposing higher taxes on capital gains for high earners, corporate profits, or specific measures targeting ongoing AI-generated returns — and by investigating innovative methods such as levies on automated work," OpenAI suggested.
The challenges will appear in both the specifics and the timing. Congress quickly passed a significant extension of unemployment benefits less than two weeks following the March 2020 Covid lockdown. Unemployment payments were more substantial than the salaries many employees had previously received. Freelancers and recent college graduates qualified for these benefits. By the summer of 2021, with vaccines driving an economic recovery, companies were competing fiercely for workers. The rise in wages led to the highest inflation rate in decades and forced then-President Joe Biden to terminate the program.
The experience indicates that a safety net that is stronger than necessary can lead to adverse consequences. Although research implies that a universal basic income does not typically reduce work incentives, the outcomes could vary if it were implemented to address a possible large-scale job loss caused by artificial intelligence.
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Jamie Dimon: Oppose AI-Driven Workforce Reductions
In February, JPMorgan Chase CEO Jamie Dimon expressed concern that the displacement of jobs by AI could occur "faster than we can adapt to." He proposed that the U.S. should establish a version of trade adjustment assistance tailored for the AI era. This program, which was discontinued in 2022, offered financial support and resources for retraining employees who had lost their positions due to international competition.
Because the program "failed," according to Dimon, stronger assistance is required. He also proposed that the government might offer benefits to companies to delay AI-related job cuts and train employees.
AI Tax Overhaul
However, the government is already experiencing significant budget shortfalls. To encourage businesses to keep employees employed while improving the social safety net in an age of artificial intelligence where tax revenues from labor are not keeping up, any incentives offered by the government might need to be accompanied by stronger penalties.
A more forward-thinking tax, whether implemented widely or specifically directed at AI companies, is the logical policy reaction to the "extremely high levels of inequality" that Anthropic CEO Dario Amodei anticipates AI will create, he stated in a January blog post.
Amodei recognizes the probable political push to impose taxes on a limited number of top AI firms.
"You can't simply go around claiming we'll generate massive wealth, much of which will benefit us, and we'll become billionaires, with no one objecting to that," he said to Axios in February.
Amodei believes that AI will transform 50% of white-collar positions within one to five years. During a May 2025 interview with Axios, he dismissed the proposal of a 3% token tax on AI earnings.
Don't Harm the AI Golden Goose
However, attaining the intended outcome in AI policy will be challenging. A fundamental concept in taxation is that imposing taxes on something leads to a reduction in its occurrence. Imposing taxes on robots, computing resources, or charging fees for AI-generated tokens "might slow down innovation and weaken the competitiveness" of the United States, according to University of Virginia professors Anton Korinek and Lee Lockwood in a January paper published by the Brookings Institution.
Approximately 75% of federal tax revenue comes from taxes on earnings, so "even small reductions in labor could place a heavy burden on public finances during a period when support for social safety nets is likely to be most critical," they note.
However, Korinek and Lockwood emphasize a "key difference" between imposing taxes on AI services when they are used versus taxing the capital assets that support them.
"Imposing taxes on the basic infrastructure of AI development would be similar to taxing steel during the industrial revolution — a policy that would harm itself and could hinder the productivity growth necessary to support public goals," they wrote.
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AI Token Tax
It might be reasonable to implement token taxes, similar to existing sales taxes at the retail level, such as a charge per thousand words or images produced by AI, according to Korinek and Lockwood. In a similar vein, although taxing robots could hinder innovation, imposing a tax on robot deliveries to end users would not. AI taxes should "exclude business-to-business transactions to prevent cumulative impacts" that could create obstacles for adopting AI in enhancing business and production operations.
I am not in favor of poorly structured tax policies," Amodei from Anthropic wrote in January. He believes that promoting forward-thinking policy development is essential, or else we will "surely end up with a subpar version created by a group of people.
Since he authored that, the creator of the Claude Code AI assistant has witnessed its annual revenue rate surge from $9 billion by the end of 2025 to over $44 billion by the end of April, as reported by the SemiAnalysis research company.
"End users are experiencing a surge in productivity — tasks that once required tens of person-hours and cost thousands of dollars can now be completed in minutes for just a few dollars' worth of tokens," stated SemiAnalysis researcher Daniel Nishball and his team. "The world transformed in December 2025, when Agentic AI started to function effectively," they noted.
OpenAI handled 15 billion tokens per minute for clients in March. This marks an increase from 6 billion in October. The ever-growing need for computing power has driven the bull market across various sectors, including semiconductors, generators, construction machinery, cooling systems, and welding equipment.MicrosoftMSFT, Google parent AlphabetGOOGL, AmazonAMZN, Meta PlatformsMETA and OracleORCL has kept increasing their significant investments in data centers.
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AI Is Not Yet a Major Job Killer
A downturn in public sentiment towards AI occurs even as AI-driven stock market gains benefit 401(k) accounts, despite little proof that the technology is significantly reducing employment. The suggestion is that political risk may increase if AI-related job losses become evident.
A Goldman Sachs economist, Elise Peng, reported in April that artificial intelligence has reduced monthly job growth by 16,000 over the last year. She pointed out fewer job postings in roles most vulnerable to AI impact. These positions include telephone operators, insurance claims clerks, and bill collectors.
Nevertheless, the total effect on payroll by AI has been small or even beneficial. Goldman points to higher hiring for data center development and potential additional labor needs resulting from AI-fueled productivity and income growth.
However, although employment appears secure, "opportunity is not," wrote Jeffrey Sonnenfeld, a professor at the Yale School of Management, in a commentary dated May 4.
So far, the disruption of jobs caused by AI is not mainly through layoffs "but by a continuous reduction in opportunities for new entrants." He pointed out data from the New York Federal Reserve indicating that the unemployment rate for recent college graduates averaged 5.7% in the first quarter. This marks an increase from 4% in the last quarter of 2022, when ChatGPT was introduced.
Tech Layoffs Rise Due to AI
Official employment data has indicated slight growth during April. However, a decline in the following year appears plausible, given the statements and actions of businesses.
Job reductions in the technology industry are increasing. According to TrueUp's count of 144,355 tech layoffs in 2026, the rate of job cuts is 47% higher than the previous year. The largest reductions are coming from major cloud service providers, such as Oracle (30,000), Meta (9,500), and Amazon (16,000), as they balance rising capital expenditures.
The AI-driven transformation is a key element of the narrative. Meta, Square-parentBlockXYZ, SnapSNAP, PayPalPYPL, CloudflareNET and CoinbaseCOIN are among those reducing staff, stating that small groups can now achieve more than larger teams previously did.
Cloudflare's CEO, Matthew Price, stated that artificial intelligence and agents have become "essential components of our team," as he revealed 1,100 job cuts on May 7.
UpworkUPWK, which manages a platform that links independent workers to over 1 million job opportunities annually, announced on May 7 that it would reduce its staff by 24%. Although income from AI-related projects increased by over 40% compared to the previous year, CEO Hayden Brown mentioned that, beginning in late February, "the rate of AI automation exceeded expectations."
Tasks that can be replaced by advanced AI tools "are essentially disappearing from the platform."
In April, Boston Consulting Group projected that between 10% and 15% of U.S. positions, equivalent to 16 million to 24 million jobs, could be at risk of being replaced by AI within the next four to five years.
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Opposition to Artificial Intelligence in Politics
Worries regarding the potential loss of jobs due to AI and its effects on local issues, like electricity costs, have led to more than 2,000 bills aimed at controlling AI at the state level in 2025 and 2026, according to Shah, Jefferies' Washington strategist.
Polling data from December, referenced by Shah and provided by the Democratic consulting firm Blue Rose Research, indicated that there was growing political momentum to regulate or slow the development of AI, though it had not yet become widespread.
Although AI represented the most significant advancement regarding voter priorities, it still held the 29th position. Approximately 40% of participants considered it a major issue, classifying AI as a "second-level" concern.
This situation could be evolving. A moratorium on data centers in Maine was nearly approved in April. Governor Janet Mills rejected it as it did not exclude a $550 million project at a site where a paper mill shut down in 2023. Interestingly, Mills withdrew her Democratic bid for a U.S. Senate seat a week afterward.
Nevertheless, the data center moratorium suggested by Sanders and Ocasio-Cortez has no co-sponsors in the Senate.
Key Catalysts To Watch
The main factors influencing investors, according to Shah, will be the outcome of legislation aimed at postponing data center development in 12 states and the "victory or defeat of candidates opposing AI" in Congress.
Those contenders and other individuals at the state level are key targets for emerging, AI-oriented super political action committees. Founders of OpenAI andPalantirSome of the supporters of the Leading the Future PAC have contributed $125 million. Meta is said to have donated $65 million to two new political action committees.
The next major indicator of whether AI is nearing a prominent role in politics may emerge in June. This is when California conducts its gubernatorial primary. Billionaire Tom Steyer is campaigning with a plan to impose a tax on corporate AI usage, using the revenue to provide cash dividends to residents and finance investments via a new state sovereign wealth fund. The top two candidates will move on to a runoff. Recent surveys indicate Steyer is statistically tied with two others at the top.
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