Tech Regulation in Limbo
Nobody knows what to expect from the incoming Trump administration
In August of this year, I wrote an article about what to expect from the Trump administration in terms of tech policy and AI regulation. At that time, I focused most of my attention on now Vice President-Elect JD Vance, who, while being a fiscal conservative, believes in breaking up big tech because of alleged silencing of conservative voices. I argued that although President-Elect Trump had called for the repeal of Biden’s AI Executive Order and has surrounded himself with traditional Milton Friedman economic types who tend to be against regulation in all forms, Vance’s presence may signal that a Trump administration might want to regulate big tech and AI firms in some way.
Now that we are on the other side of the election, Trump’s picks for several key positions reveal contradictions in his party’s views on tech and AI regulation - and makes the next few years hard to predict.
For starters, there is Elon Musk who donated over 20% of Trump’s campaign contributions, sits on his new Department of Government Efficiency (DOGE) Taskforce, and influences the president to an unclear degree as of yet. Musk has several pending lawsuits against OpenAI and remains bitter for having been pushed out of the firm a few years ago. Whether for those reasons or for reasons that are more socially focused, Musk has come out publicly in favor of AI regulation, citing existential risks. He also supported California Senate Bill 1047, a progressive bill vetoed by Governor Gavin Newsom that would have aggressively reigned in companies building large language models.
On the other side of the argument is David Sacks, renowned venture capitalist, host of the “All-In” podcast, and another Trump megadonor. Trump has designated Sacks as his “White House AI and Cryptocurrency Czar,” another position whose power is to be determined, but likely will be at the center of AI regulation. Sacks has been a longtime critic of tech regulation from a more libertarian angle, arguing that regulation in all forms stifles innovation and hurts American competitiveness, particularly vis a vis China.
Somewhere in between is Craig Ferguson, Trump’s designee to lead the Federal Trade Commission (FTC). Ferguson has committed to taking on big tech according to Vance’s misguided rationale - that liberal tech companies are restricting conservatives’ free speech. However, he has also said he will not seek to regulate generative AI or block mergers and acquisitions as did his predecessor, Lina Khan.
And then there is Trump. Trump has stated that he wants to repeal Biden’s AI executive order, although some experts think he would replace it with a modified version highlighting areas where are bipartisan support. Moreover, AI is not the only policy area where Trump has nominated officials whose policy views conflict — in fact, internal conflict within the administration is a feature, not a bug, of Trump’s governance.
So, where does that leave us? First, it leaves us, at a federal level, looking towards the White House to see who’s up and who’s down within Trump’s inner circle - who is currying favor with the president at any particular moment. Whoever is the last person to meet with Trump on a given issue usually is able to influence him, and it will be interesting to see which of these leaders gets their way on tech regulation.
Second, it also means looking towards Europe and the states, particularly California. Europe has not hesitated to lead on tech regulation (see: the AI Act and GDPR), and amidst the turmoil of a Trump administration, may take additional steps to reign in generative AI. Additionally, although SB 1047 failed in California, it, along with other liberal states, have vowed to use their own authority to advance progressive causes. It is easy to imagine them extending that mandate to include protecting consumers from generative AI’s harms, especially in California, where the largest tech companies are headquartered.
Third, it means looking towards China. As the U.S.-China relationship becomes increasingly adversarial, expect the generative AI debate to take a turn towards arguments around competitiveness and national security. If the argument turns that way, as I expect it will, policymakers will be reluctant to reign in AI companies whose innovation will be crucial to outstripping our largest geopolitical adversary.
Certainly there will be more to come in this area as the dynamics begin to play out in the new administration. We are still in the early days of AI regulation, and the slightest shifts will have a significant impact on the future we live in.