Alaska Permanent Fund

So what are data center dividends? To explain them, I think it's easiest first to look at the state of Alaska.

For those who don't know, in the state of Alaska, they have this incredible program called the Alaska Permanent Fund.

With the Alaska Permanent Fund, the oil royalties that the state collects are invested into an endowment.

And then the investment earnings from that endowment are then paid to every resident of Alaska every year.

It's this incredible program where those payments, which average about $1,500 a year for the last decade, go towards not only adults but towards children as well so if you're a four-year-old child who lives in alaska you are eligible to receive a 1500 check from the government that comes from the oil industry in the state it's an incredible benefit and i started to ask myself can that particular model be scaled in any way as it turns out it can and that's the math we figured out with data center dividends so what makes alaska work is two things number one it's a huge land mass with a very small population number two it has this incredible energy resource when you think about it america's rural counties have the exact same properties they have small populations relative to their land mass and an incredible energy resource or another way of thinking of it they have pristine real estate for ai development so what they've lacked though is some kind of public mechanism that can help turn those earnings into something that benefits everybody in the county so with data center dividends we took a look at the amount of tax revenue that a one gigawatt data center will generate which is in the hundred about 150 million dollars a year uh depending on obviously the county this is an estimate so it's not an across the board uh rule but that's our estimate just based on uh data we got from loudoun county virginia the most data center rich data set in the country.

It's essentially acknowledging that the economic benefits of artificial intelligence, which, let's remember, was trained on the collective data of humanity, should be shared broadly across society.

I look at this mechanism and I immediately think of the Alaska Permanent Fund.

That is a highly accurate comparison.

In Alaska, a portion of the state's oil revenue goes into a fund, and every resident gets an annual dividend check just for living there.

Right.

You know, you were talking about the PFDs in Alaska and how they're dropping and you're getting less money and all that sort of stuff.

But you got to be just excited as hell.

about Donald Trump at his convention telling us that he's going to send each and every one of us $5,000 should the Republicans win the House and the Senate, which won't happen, which is why he made that claim.

Companies are being charged a fee for using up a shared public resource, which is the atmosphere's capacity to absorb CO2.

Something in Alaska, which is interesting, have you come across the Alaska Permanent Fund? No.

So Alaska apparently takes the state's shared natural oil wealth, which is, I suppose, part of the land, charges oil companies for extracting it, and then citizens get a yearly dividend check.

There you go.

Yeah.

Think of it somewhat like the Alaska Permanent Fund, where oil revenues are collected and distributed to residents.

But in this case, the financial dividends and the capital gains generated by the industry's massive productivity increases, they would be collected by a government and distributed to the public.

The goal being to basically offset the economic damage of those millions of lost or degraded jobs and to fund the public infrastructure that AI relies on.

Well, and look, some of the proposals that you've heard, I mean, Vic out of Ohio has said, look, if you're going to build a data center and a zip code, give them free power.

We've seen other proposals talk about the fact that just like the Alaska Permanent Fund that really pays for oil extraction in Alaska, gives people a check every single month, a form of UBI, a pay and use.

That's right.

Look, honestly, if you want to get people to support data centers, start paying people.

And so I think you and Mike are right.

I think we need to think about whether it's an Alaska Permanent Fund analog.

or a universal, I don't think about it as universal basic income, I subscribe to Elon's formulation, it's a universal high income.

Because you're going to see massive deflation of the cost of care.

And another, uh, difference is also who hold, holds it.

So the OpenAI model, um, they're talking about a fund modeled on the Alaska Permanent Fund, which requires, uh, congressional approval and, uh, this fund holding stakes in a lot of different, uh, labs a- and so on.

But here it is, uh, um, um, the details are not clear in the Indian case, but I guess it would be the, uh, Meity or a line, uh, uh, or some other line ministry holding this, uh, stake.

So, um, so these are, I guess, the two differences, the broad differences between the two arrangements.