Trump's shadow AI policy

The Trump administration entered office promising to get government out of the AI industry's way. It hasn't worked out that way.

Why it matters: The White House says AI shouldn't be regulated, but it's shaping the industry through case-by-case interventions without clear rules, creating major uncertainty.

• What has emerged is a shadow AI policy, one that shapes the AI industry's future without ever spelling out the rules.

The big picture: The Trump administration has made opposition to AI regulation a cornerstone of its AI agenda, rescinding Biden-era requirements and arguing that excessive rules would slow innovation.

• Yet its light-touch, hands-off vision for AI has given way to an ad hoc system of company-specific interventions, voluntary frameworks and executive actions.
• Unlike traditional regulation, this influence operates outside of the formal rulemaking process, with few published standards and limited guidance for companies to help navigate the administration's expectations.

Friction point: It is supposed to be the role of Congress to make laws the administration then enforces.

• But despite recent efforts, including a bipartisan AI safety bill introduced in the House, Capitol Hill is frozen on AI as midterms loom, and the administration is taking the lead with executive action.

Without clear national AI rules set by Congress, the administration has focused on overriding state AI laws, the national security and cybersecurity implications of advanced AI models, the procurement of AI systems into the federal government and the economic impact of the biggest AI companies.

• Export controls, voluntary testing frameworks, and procurement guidelines are becoming the building blocks of the administration's shadow AI policy and a guide for how AI companies operate in the U.S.
• AI CEOs talked with Trum at the G7 summit on Wednesday about the possibility of what OpenAI's Chris Lehane described as a global forum for AI standards.

As Anthropic and the administration hash out whether export controls can be lifted on its latest models, other leading AI labs are working out how to comply Trump's latest executive order, which established a voluntary framework for government review of some advanced AI models.

• The Anthropic situation also illustrates a central concern for the industry: uncertainty. Without clear rules, companies can find themselves navigating personalities and broader politics as much as policy.
• The General Services Administration is also considering a new rule around safeguarding data when LLMs process government information that would set certain privacy and security standards for companies wishing to contract with the government.

Zoom out: The administration's moves are not regulation in the sense of Europe's AI Act or the UK's Online Safety Act. But because the U.S. is the home of the world's most advanced models, its decisions matter the most.

• At the G7 summit this week, the notion that other countries need to establish "tech sovereignty" so as to not rely on American companies loomed large.
• But foreign leaders also know they can't ignore the world's leading models and only rely on homegrown AI.

The bottom line: The Trump administration may not call it AI regulation, but its decisions are dictating the future of the technology around the world.