The numbers come first. Fortune's William R. Gruver argues that artificial intelligence should be regulated through a self-regulatory model rather than a direct government takeover.
Gruver points to Franklin D. Roosevelt's handling of financial markets in the 1930s. Roosevelt rejected calls for bank nationalization and instead supported the Securities Exchange Act of 1934, which created a framework for 'Self-Regulatory Organizations' that would set standards, conduct oversight, enforce rules and punish bad actors, with the SEC keeping a supervisory role.
The commentary says that approach helped finance by combining public authority with private expertise. It cites FINRA, formed in 2007, as an example that is 'widely regarded' for protecting investors while encouraging innovation that expands accessible and affordable investing.
Gruver contrasts that model with Europe, where centralized government regulation is 'the name of the game.' He says U.S. capital markets have flourished while Europe's have struggled under the weight of government mandates. In his view, FDR's model beat both 'largely unregulated capitalism' and a 'strangling bureaucratic leviathan.'
The argument then turns to AI. Gruver says the industry is currently largely unregulated and faces calls for a de facto government takeover, including Sen. Bernie Sanders' June proposal for a public 50% ownership stake in the largest AI companies. He says putting the federal government in control would be the quickest way to 'squelch' AI's potential and give Communist China an 'unassailable lead.'
He also rejects simply expanding existing bureaucracies or giving the government primary regulatory authority, saying leading AI companies may favor that path because it would protect their dominance from new entrants. Instead, he urges Congress to craft a 21st-century version of the Securities Exchange Act's self-regulatory model, with strong legal guardrails to prevent anticompetitive behavior or cartel protection.
For markets, the principle is familiar: capital rewards clear rules, not political improvisation. If AI is destined to shape productivity, margins and national power, the fight is over who sets the rules first — entrepreneurs with oversight, or the administrative state with a heavier hand.
The market has already voted on the broader question. Innovation moves faster when the state keeps a distance and lets competition discipline excess. That does not mean no rules; it means rules that preserve free enterprise instead of smothering it in bureaucracy.
