The Big Catch In AI Billionaires Offering Stock 'Gifts" To America

It is well-known that some Americans can be bought. And some of them even hold high public office. But with pubic skepticism about AI leaders at 74%, the news that AI company leaders are now contemplating or promising billions in stock giveaways of various shades and complexions so that Americans can share in the bountiful promise of AI is being greeted with less than fulsome praise or public acclamation.

The reasons are borne of Americans' relatively new-found cynicism about the motives of tech leaders and a rather impressive focus on who actually benefits from this largesse. First of all, Anthropic, which is generally perceived, correctly or not, as less single-mindedly predatory than OpenAI, is creating a fund from which it will disperse gifts 'for the public benefit.' Who, exactly, decides what the public benefit is, has not been revealed, nor what happens if the public itself disagrees with those decision-makers' definition of it. Next, Elon Musk, announced that he would give 'every kid in America' a share of SpaceX. His pal, Donald Trump, immediately concluded that this putative gift would be placed in the newly launched Trump accounts of American children. But there is a catch: such gifted shares cannot be rejected and cannot be sold for five years. Which would provide a handsome floor for the donor whose SpaceX and Tesla companies, which are dependent on US government largesse but face financial headwinds. Then there are the tax benefits for such gifts, which significantly reduce the actual cost. That the Musk Foundation has failed to meet minimum asset gift requirements for four of the last five years, raises further, ah...questions. In short, this is better than nothing, but appears to be a bold faced attempt to improve the AI industry's reputation as opposition to data centers and AI continues to rise. JL

Will Gottsegen reports in The Atlantic, Rebecca Crosby and Noah Sims report in Popular Information:

On Sunday, Anthropic committed 5% of its shares to the Anthropic Public Benefit Fund, “a new wholly owned entity dedicated entirely to the public. On Monday, "Next year, I will give one of my SpaceX shares to every kid in America,” Elon Musk wrote. Musk did not provide details, including whether shares would be given to every person under 18 or the timing. There are reasons to be skeptical of Musk’s and other AI leaders' motivations. Musk is the world’s richest person, with a net worth of $904 billion. A donation of $10.5 billion is about 1% of his net worth. The donation of  stock would provide huge tax benefits. Plus, private foundations, including Musk's, are required to give away 5% of their assets each year. Musk's Foundation fell short of this requirement in 2021, 2022, 2023, and 2024. If he uses Trump Accounts for dispersal, parents can’t reject donated shares, and they can’t sell them for five years. 74% of Americans have little to no trust in the leaders of AI companies.

On Monday morning, Elon Musk announced in a post on his social media platform X that he plans to give American children one share of SpaceX, his rocket, satellite, and AI company. “Next year, I will give one of my SpaceX shares to every kid in America,” Musk wrote. “This will be the first of many.”

One share of SpaceX stock would be worth around $146 for each child, based on Friday’s closing price. According to 2025 census data, there are around 72 million children in the United States. If Musk donated one share to every child, the giveaway would be valued at around $10.5 billion today.

Musk did not provide any details on the giveaway, including whether shares would be given to every person under 18 or the exact timing of the giveaway. It is also not immediately clear how Musk would distribute the SpaceX shares to American children. On X, Musk responded “Yes” to a post about the shares potentially being distributed via Trump Accounts. A person familiar with the matter told Bloomberg that Musk has “agreed in principle to distribute the stock through the Trump Accounts initiative.”

On Monday, President Trump celebrated Musk’s announcement, writing in a post on Truth Social that the shares would be going to Trump Accounts. “A BIG THANK YOU to our legendary friend, Elon Musk, for his incredible generosity in giving SpaceX Stock to millions of American children through TRUMP ACCOUNTS!” Trump wrote.

Trump Accounts are savings accounts for children that were launched on July 4. This summer, Trump said in an interview that he believed that Musk would donate SpaceX stock to Trump Accounts. “Well, I think that he will do that,” Trump told CNBC. In July, SpaceX President Gwynne Shotwell separately announced that she and her husband would be donating a share of SpaceX to around two million children with Trump Accounts.

While, at first blush, it seems like an act of charity, there are reasons to be skeptical of Musk’s motivations.  

Although Musk’s path is also billionaire-led, it gives Americans a much more direct stake. Donald Trump clarified yesterday that Musk’s donation, if it happens, would use the country’s new child-savings accounts (known as “Trump Accounts”) as a vehicle. Rather than earmarking shares for a self-sustaining charitable foundation, Musk would be effectively cutting out the middleman, giving American children a piece of the company that houses his biggest AI bets. It would likely be a smaller total donation than Anthropic’s; one share per child may not turn out to be all that much money in the long run. And Trump Accounts aren’t a perfect dispersal mechanism; parents can’t reject donated shares, and they can’t immediately sell them. Once account holders turn 18, though, they can spend Musk’s gift on whatever they want.

Changing the narrative

A Quinnipiac poll conducted last month found that 74% of Americans have little to no trust in the leaders of AI companies. This is a major problem when AI companies are seeking approval from communities to build massive data centers, trying to convince millions of Americans to buy their products, and lobbying for legal protection from liability risks.

Is Musk motivated by a sincere desire to help American children? Or is this just a public relations gimmick? Influential figures in Musk’s orbit have suggested rehabilitating the image of the AI industry is at least part of the motivation.

David Sacks, Musk’s longtime friend and co-chair of the President’s Council of Advisors on Science and Technology, has been advocating for AI companies to donate stock as a way to change the perceptions of the public. In a post on X, Sacks wrote, “I hope every AI company will follow the lead of [Shotwell] and give American kids a vested interest in their success. This would do much to improve the public’s image of AI.”

A memo from the Treasury Department on Trump Accounts says, “Donors are attracted by the hope that a stock contribution with a five-year holding period may lead recipients and their families to feel that they have a stake in the fate of the corporation to a greater extent than if the child’s holdings of the corporation were only through an index fund.” Any child who has a Trump Account will not be able to sell their donated SpaceX stock for at least five years.

There is considerable potential for Musk and other AI executives to use stock donations to sway the interests of an entire generation of children and their parents. While Musk announced donating one share to all children, future gifts could be targeted to specific geographic areas. For example, if a company wanted to construct a data center in a particular area but was facing pushback, it could donate stock to all of the children in the area.

For Musk, all of this comes at a small cost. Musk is the world’s richest person, with a current net worth of around $904 billion, according to Bloomberg. A donation of $10.5 billion is just over 1% of his net worth.

Musk also may have been seeking to keep up with one of his rivals in the AI industry. On Sunday, Anthropic committed 5% of its shares to the Anthropic Public Benefit Fund, which it described as “a new wholly owned entity dedicated entirely to the public benefit.” Overall, about 20% of Anthropic’s shares have been dedicated to the public good. The co-founders have personally pledged 80% of their equity to charity.

Under Anthropic’s announcement on X, Musk replied, “I recommend giving the shares directly to the public.” The next morning, Musk declared his own donations.

Tax benefits

The donation of SpaceX stock would provide huge tax benefits to Musk personally.

As the founder, Musk paid essentially nothing for his SpaceX stock. Giving the shares away allows Musk to avoid about $2.5 billion in federal capital gains tax.

Because stock donations must be routed to Trump Accounts through a non-profit charity, the donations also count as a tax-deductible charitable donation and can generally be written off at their full market value for up to 20% of the donor’s adjusted gross income.

Musk has not said which private foundation he would make the donation through, but it seems likely that he would use his own Musk Foundation. Not only would this help Musk secure a tax deduction, it would also help the Musk Foundation meet its minimum annual giving requirements — which it has a history of violating.

Private foundations, including the Musk Foundation, are required to give away 5% of their assets each year. According to the New York Times, the Musk Foundation fell short of this 5% requirement in 2021, 2022, 2023, and 2024. The current value of the Musk Foundation is unknown, but its assets were worth over $14 billion in 2024.

The uncertain future

The pledge to donate billions of dollars in stock is just one in a long line of grand promises made by Musk. In several previous cases, he has reneged or not fully fulfilled his promises.

For example, in 2021, Musk told the United Nations’ World Food Programme (WFP) that if they could come up with a $6 billion plan to solve world hunger, he would sell Tesla stock to fund it. WFP quickly sent Musk a plan, but he did not donate the $6 billion.

Musk later donated $5.7 billion in Tesla stock — to his own foundation.