President-elect Donald Trump rarely discussed artificial intelligence (AI) on the campaign trail, but he’s likely to have a profound impact — to Big Tech’s delight — with a series of actions soon.
In short order, Trump is expected to dismantle President Joe Biden’s executive order from a year ago, establishing oversight of AI development that requires companies to submit reports about AI training methodologies and security measures, including vulnerability testing data. And he’s poised to stanch AI regulation.
The order, which established the U.S. AI Safety Institute and empowered the Commerce Department’s National Institute of Standards and Technology (NIST) to develop guidance for companies to identify and fix flaws in their AI models, has been strongly opposed by Trump supporters on the grounds it stifles innovation. Newly re-elected Sen. Ted Cruz, R-Texas, called NIST’s AI safety standards an attempt to control speech through “woke” safety requirements.
Chris Hart, partner and co-chair of the privacy and data security practice group at law firm Foley Hoag, said he expects Trump to quickly scrap the executive order, which Trump considers red tape, and alleviate any regulatory pressure around AI.
“The environment that we’re currently operating in is very fragmented, creating an opening for the (European Union) to establish regulatory schemes,” Hart said. “Both parties are China skeptics, especially Trump, but there is the potential of giving China an edge toward AI.”
AI regulation is likely to take an even bigger hit when Trump takes over in January and fires Federal Trade Commission Chair Lina Khan, whose agency this year launched an inquiry into generative AI investments and partnerships involving OpenAI, Microsoft Corp., Alphabet Inc., Amazon.com Inc., and Anthropic. Musk advocated removing Khan from her post in a recent tweet.
Where that leaves AI is a federal landscape that defers any decisions to states and agencies, say industry analysts.
“Decentralizing is a theme of Project 2025, and I think it may apply to AI as it does to abortion,” Rohan Kulkarni, executive research leader, healthcare and life sciences at HFS Research, said in an interview. “There will probably be no federal AI policy; the administration will allow states and agencies to decide.”
Unfettered rules is likely to spur a “significant boom in technology spending and development with the new administration,” predicted Ivan Nikkhoo, managing partner at Navigate Ventures. “Specifically with AI, it is likely that the speed of development could accelerate. The new administration is more friendly to manufacturing, and developing new and improved chips with faster processing power and lower heat dissipation are key to the development of a new generation of AI applications. They also understand the need for new sources of energy, specifically nuclear, which will be needed for significant AI energy requirements.”
While Trump’s deregulatory stance on both AI and FDA approvals suggests an accelerated path for drug development, several economic headwinds could significantly complicate the picture,” warned Dave Latshaw II, CEO and founder of BioPhy, in an email. “Economic factors present serious challenges to this innovation landscape. Trump’s fiscal policies, which investors expect to increase deficits and debt, could trigger higher interest rates and a stronger dollar.”
Added Ilan Twig, chief technology officer and co-founder at Navan: “I think President-elect Trump recognizes the massive potential of AI as a strategic driver of innovation and security, supporting increased investment and proposing a less stringent regulatory framework that encourages growth while maintaining government oversight.”
Meanwhile, Tesla Inc. CEO Elon Musk’s outsized influence on the Trump campaign is likely to rev up AI innovation and development in the U.S. as a result.
“We’ve been racking our brains the last 48 hours on what Trump will do after he didn’t say much on AI,” Phil Fersht, CEO and chief analyst at HFS Research, said in an interview. “It depends on the role of Musk in forming AI policy, and whether it benefits the country or his companies.”
A lack of federal guardrails such as an executive memo or aggressive FTC could inadvertently cause some enterprises to pause what recently has been a “comfortable adoption” of AI, Fersht said.
“You remove the checks and balances, and some companies become risk averse,” he said. “Chaos makes them shy away from innovation and investment.”
Economic factors tied to other Trump policies could cause squeamishness among enterprises.
Trump’s proposed 60% tariff on Chinese products is likely to impede the AI industry’s access to technology and capital, potentially interrupting GPU supply necessary to accelerate training and inference tasks. The administration could also galvanize export controls on AI chips and models to China.
Additionally, Trump’s plans to restrict H-1B visas and expand drilling could curtail the ability of AI vendors to recruit talent and access computing resources.
Cliff Jurkiewicz, vice president of global strategy at Phenom, is holding out hope for federal law. “A presidential executive order and a mish-mash of state regulations are the only guidelines governing AI in the world’s lone superpower,” he said in an email. “None of those measures, however, can take the place of federal legislation.”
