Why the AI Boom Is Enriching the Same Old Players — and How That Could Change
There is a figure worth holding in mind for a moment before moving to the analysis: in 2025, artificial intelligence companies absorbed 61% of all global venture capital investment, according to the OECD. That represents $258.7 billion out of a total of $427.1 billion. In the first quarter of that same year, a single $40 billion AI deal doubled global venture capital activity from one quarter to the next. This is not a sector within the market. It is the market.
Now comes the question that number inevitably opens: who is capturing that value? The short answer is that it is not ordinary investors, not conventional pension funds, and certainly not middle-class citizens who hold an account in an index fund. The wealth being generated by this technological wave is being built inside a private circuit to which most people have no legal access — not through negligence, but through regulatory design accumulated over decades.
A venture capital veteran with 25 years in the industry put it with a clarity that is rarely seen in this kind of analysis: the problem is not that billionaires pay too little in taxes. The problem is that the current system makes it practically illegal for the middle class to participate in the largest wealth-creation events in modern history. That deserves to be taken seriously as a structural diagnosis, not as political rhetoric.
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The Mechanism That Replaced Public Stock Markets
During the 1980s and 1990s, the most important technology companies in the world went public relatively early in their life cycle. Microsoft, Intel, Cisco, Amazon: a large share of their value appreciation occurred while they were listed on public markets, where anyone with a brokerage account could buy shares. That was not a deliberate inclusion policy. It was simply how the model worked: if a company needed capital at scale, the public market was the most efficient path.
That mechanism stopped working that way after 2002, when the Sarbanes-Oxley Act added layers of regulatory compliance that became especially burdensome for small and medium-sized companies. Combined with the securities laws of 1933 and 1934, which restrict investment in private placements to accredited investors — meaning individuals with a net worth exceeding one million dollars or annual income above certain thresholds — the conditions that would lead a high-growth company to prefer remaining private became systematically more favorable.
The visible result is the contraction of the public market. The Wilshire 5000 index, which was created to capture the entirety of the U.S. equity market, today covers approximately 3,100 companies. That number alone tells the whole story about the direction of travel.
What occurred in parallel was the construction of a private ecosystem robust enough to replace what public markets used to offer: large-scale capital, selective liquidity for founders and employees, active secondary markets, and institutional investors willing to write increasingly larger checks. OpenAI, Anthropic, and SpaceX have been operating within that structure for years. They can raise billions of dollars without submitting to Wall Street's quarterly scrutiny, without disclosing sensitive strategic information, and without exposing themselves to the litigation that accompanies public companies.
From the perspective of their boards of directors, that decision is perfectly rational. A company with a market capitalization of $100 million can be severely damaged by a $10 million lawsuit, even if the claims are weak. The combination of compliance costs, legal exposure, and public scrutiny creates very concrete incentives to remain inside the private circuit for as long as possible. The problem is not the rationality of each individual company. The problem is what that pattern produces in aggregate over two decades.
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A Private Market With Many Toll Collectors
The private capital ecosystem that has replaced the public markets is not exactly an efficient structure from a cost perspective. It has intermediaries at every link in the chain: placement agents, secondary market platforms, structured vehicles, funds of funds — each one taking its management fee and its share of profits. Founders and managers pay that toll through effectively lower valuations, greater operational friction, and less liquidity than they would have in a well-organized public market.
Meanwhile, the players who do have access to that circuit operate with structural advantages that mutually reinforce one another. Large-fortune wealth management offices and sovereign wealth funds can write larger checks, hold positions for longer periods, and move across borders and asset classes without the restrictions imposed by the ten-year fund lifecycle model used by traditional venture capital funds. According to analysis published by Family Wealth Report, "some of the largest and most consequential deals in technology, health, and life sciences have not been led by traditional venture capital funds" — but rather by precisely these patient capital structures that do not need to return money to their investors within a defined timeframe.
LGT Capital Partners, which specializes in private investment in AI, reports having deployed more than $7 billion across more than 155 AI investments since 2012, with approximately 80% of that activity concentrated in seed and Series A rounds. That kind of early access — where the greatest share of appreciation potential accumulates — is completely out of reach for a retail investor or a standard pension fund.
Lawrence Fink, Chairman and CEO of BlackRock, has warned that the AI boom could widen the wealth gap to the extent that financial advisors push their clients toward markets, because that amplifies the difference between those who have capital already positioned and those who do not. The warning is valid, but incomplete: even those who participate in public markets only access the final chapter of the value story of these companies. The bulk of the appreciation already occurred before any public price existed.
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What the Insider Proposes
The argument made by the venture capital veteran who originated this debate is not particularly ideological. It is structural. And his proposals deserve to be analyzed with the same pragmatism with which he frames the diagnosis.
The first is reform of the shareholder litigation system, including "loser pays" rules to discourage frivolous lawsuits. This would reduce one of the factors that weighs most heavily in the decision to remain private, especially for smaller companies. The effect on the supply of public companies would be gradual rather than immediate, but it would correct a real distortion.
The second is expanding individual access to investment vehicles in private markets. The accredited investor rules that currently govern in the United States were designed for a different era of the market. Updating those criteria — or creating new categories of regulated vehicles that allow retail investors to gain diversified exposure to high-growth private companies — would correct part of the exclusion without eliminating the protections that still make sense.
The third is the most ambitious: the creation of a federal sovereign wealth fund in the United States. More than 90 countries already operate structures of this kind, including Norway, Saudi Arabia, the United Arab Emirates, Malaysia, Nigeria, and Peru. At the subnational level, states such as Texas, Alaska, and New Mexico have built versions that have strengthened their public finances and expanded the long-term economic benefits available to their citizens. The idea is that such a fund would not redistribute wealth after it has been created, but would invest alongside the actors who currently enjoy privileged access — so that when the winning companies of the AI cycle win, the country wins with them.
The historical comparison the author draws is a useful one: Social Security was the response to the fear that Americans would grow old without resources in the wake of the Great Depression. Corporate and union pension funds extended that same logic by giving a broad segment of the country a stake in economic growth. Those pensions have retreated precisely at the moment when the largest gains of modern capitalism are being generated in private markets that most Americans cannot access. A federal sovereign wealth fund would be the updated version of that mechanism for the current technology cycle.
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The Pattern That Better Regulation Alone Cannot Change
There is a dimension of this problem that regulatory proposals do not resolve on their own, and that is the convergence dynamic occurring within venture capital itself. According to the analysis published by Family Wealth Report, as more funds adopt selection tools based on language models, their methods for sourcing and selecting investments tend to converge. Capital accumulates more rapidly in the obvious categories — which are precisely the ones already dominated by the largest players with the greatest check-writing capacity. AI as an investment tool accelerates concentration rather than distributing it.
That means reforming individual access to private markets is not sufficient if the dynamics of capital continue to concentrate the largest and earliest rounds in the hands of actors with the most patient capital and the greatest scale. A retail investor who gains access through a private equity fund of funds is still arriving late and through multiple layers of fees. A sovereign wealth fund, by contrast, can operate at the scale and with the time horizon that today only the sovereign wealth funds of other countries and large private wealth management offices possess.
The wealth creation of the AI cycle is already underway. Rounds are closing, valuations are being set, and the beneficiaries are being selected by the current architecture of the market. Every quarter that passes without a structural adjustment is a quarter in which that distribution becomes more entrenched. The window for intervening before the value is entirely captured is finite, and the strongest argument in favor of a sovereign wealth fund is not redistributive — it is precisely the opposite: that participating in the creation of that value is more efficient than attempting to recover it afterward through taxes on wealth that has already been accumulated.
