OpenAI's Tax Subsidy Efforts Amount to Silicon Valley Socialism (news.bloombergtax.com)

OpenAI recently asked the U.S. government to expand the CHIPS Act’s Advanced Manufacturing Investment Credit so that the federal tax credit (up to 35%) would apply not just to semiconductor fabs but to the entire AI infrastructure stack—data centers, grid components, steel and related buildouts. That request, layered atop existing state and local incentives (long property-tax abatements, cheap land, discounted power, expedited permitting), would effectively underwrite large portions of private AI infrastructure development and risks duplicative “double-dipping” of public subsidies. For the AI/ML community this matters because it shapes where compute is built, how quickly capacity scales, and who ultimately pays for the environmental and grid impacts. OpenAI’s own estimate—roughly 100 GW of new capacity per year required to close an “electron gap”—signals a near-term doubling of recent U.S. power additions and major strain on grids. The debate shifts from whether industrial policy is warranted to how it’s structured: proposals include enforceable public-benefit conditions (energy and emissions reporting, revenue-sharing with host communities, co-investment in grid upgrades, renewables minimums, impact assessments, clawbacks, and transparent disclosure of overlapping tax deals). Without such strings, federal support risks subsidizing private, vertically integrated infrastructure that prioritizes corporate return over local taxpayers, resilience, and decarbonization.