The Public Pension AI Boom

President Trump and Bernie Sanders have argued for the government taking equity stakes in AI companies to ensure the public benefits. A new report by the Equable Institute on the state of government pensions shows that the taxpayers and public workers are already profiting plenty from the AI market boom.

The tech-heavy Nasdaq has had its down days of late amid concerns about economic collateral damage from the Iran war. Yet the economy is proving to be remarkably resilient in large part thanks to an AI investment boom. Optimism about AI has helped push the Nasdaq up 21% over the last year and 71% over the last five years.

The rising AI tide is lifting many non-tech company boats, including GE Vernova (up 49% in 12 months) and Caterpillar (89%), which make turbines for natural-gas plants that power AI data centers. The market boom has also boosted the funding ratios of government pension funds, which Equable estimates hit 85% nationwide this year—the highest since 2007.

Equable estimates that about 8% to 10% of government pension funds are invested in a basket of 51 publicly traded AI-related companies. This doesn’t include investments in privately managed funds that own stakes in private AI companies like OpenAI and Anthropic. While AI is yielding tremendous returns for pension funds, it also bears a warning.