Introduction
The incoming Trump administration is set to significantly alter the regulatory framework for artificial intelligence (AI) in the United States [1], primarily through a deregulatory approach that emphasizes national security, particularly in relation to China [5] [6]. With Republican control of both chambers of Congress [6], the administration is expected to advance AI legislation that aligns with its vision, contrasting with the previous administration’s focus on safety and risk mitigation. This approach is anticipated to prioritize innovation and economic growth while maintaining US dominance in the tech sector, especially in competition with China [5].
Description
The incoming Trump administration is poised to significantly reshape the regulatory landscape for artificial intelligence (AI) in the US [1], particularly through a deregulatory approach that emphasizes national security provisions related to China. With Republicans controlling both chambers of Congress [6], Trump is expected to advance AI legislation that aligns with his vision [6], contrasting with the previous administration’s focus on safety and risk mitigation. His approach is anticipated to favor deregulation, prioritizing innovation and economic growth while aiming to maintain US dominance in the tech sector [5], especially in competition with China [5].
While there are indications that the administration may roll back existing initiatives aimed at ensuring the safe and secure development of AI, key regulatory initiatives are anticipated to remain focused on national security. These include:
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Investments in Chinese AI Companies: A final rule from the Treasury Department [2], effective January 2, 2025 [2] [3], restricts US investments in Chinese companies involved in AI [2] [3], quantum technologies [2] [3], and semiconductors [2] [3] [5], imposing additional diligence and recordkeeping requirements [2]. Concerns about national security risks associated with Chinese technology companies have led to sweeping actions during Trump’s tenure [5], including restrictions on investments in critical technologies [5].
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AI-Related Export Controls: The Commerce Department’s Bureau of Industry and Security (BIS) has tightened export controls on semiconductors and related items, including those used in AI systems and machine learning applications, to limit exports to China [2]. The administration may further strengthen these restrictions in response to competition with China and challenges posed by a black market for banned AI components [1].
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AI Model Reporting Requirements: A proposed rule by BIS mandates AI companies to report on the development of dual-use AI foundation models and cybersecurity measures, with periodic reporting similar to existing disclosures [2].
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Cloud Services Reporting Requirements: A proposed rule requires US cloud service providers to report foreign customers using their services for training large AI models for potential malicious activities. This proposal has faced industry pushback [2], and a final rule is anticipated in December 2024 [2].
While President Trump has indicated intentions to prioritize the promotion of AI innovation within the private sector, significant changes to national security-oriented initiatives are not expected [2]. Bipartisan support exists for restrictions on outbound investments in technologies of national security concern [2], and further restrictions may be imposed by the new administration [2]. Trump’s approach will likely include expanding protectionist measures against foreign adversaries [6], particularly China [1] [2] [5] [6], to safeguard US technological advancements [6], potentially involving tariffs and other restrictions to limit foreign exploitation of US AI developments [6]. Defense-related export and technology controls will continue to be a focus [2], with ongoing scrutiny from the Committee on Foreign Investment in the United States (CFIUS) regarding foreign investments in domestic AI capabilities [2].
The implementation of AI-related US supply chain restrictions is also anticipated [2]. The draft rule concerning the transfer of data about US persons to China is unlikely to see significant changes [2]. Proposed reporting requirements for US AI companies and cloud service providers may be altered or delayed due to industry concerns [2].
Additionally, efforts to accelerate national security-related AI innovation in the US may be pursued [2], with potential initiatives to prioritize the recruitment of non-US AI talent under immigration laws [2]. The administration is also expected to seek input from industry leaders on policies governing the integration of autonomous vehicles, ensuring safe coexistence with traditional vehicles [1]. There is a possibility of introducing federal legislation to streamline AI regulation [1], potentially preempting state laws that could hinder US competitiveness in AI development [1].
Legislative efforts that may gain traction include the Defiance Act [4], which would allow victims of AI deepfakes to pursue legal action [4], reflecting a growing bipartisan interest in addressing legal challenges posed by AI technologies [4]. Influential figures in Silicon Valley [5], including venture capitalists and tech founders [5], have called for less regulation [5], although some [5], like Elon Musk, advocate for AI safety and careful development [5], which could lead to a more centrist regulatory approach balancing innovation with public safety concerns [5].
Overall, the next four years are expected to bring significant changes in AI policy and regulation [1], necessitating a balanced federal response to effectively manage the evolving landscape of this technology while maintaining US dominance in the field and addressing national security concerns. Rapid advancements in AI and the increasing accessibility of AI tools present distinct national security risks and opportunities [3], prompting US regulators to implement prohibitions, restrictions [1] [2] [3] [5] [6], and reporting requirements across the AI supply chain [3], particularly concerning defense and cyber applications [3]. The absence of a solid regulatory framework raises concerns about the ethical and safety implications of AI development [5], potentially leading to a scenario where progress is prioritized over critical safeguards [5].
Conclusion
The anticipated changes in AI regulation under the Trump administration are expected to have significant impacts on the US tech sector, particularly in terms of innovation and economic growth. By prioritizing national security and competition with China, the administration aims to maintain US technological dominance. However, this approach may also lead to challenges in balancing innovation with safety and ethical considerations. The evolving regulatory landscape will require careful management to address national security concerns while fostering technological advancement.
References
[1] https://www.brookings.edu/articles/ai-policy-directions-in-the-new-trump-administration/
[2] https://www.jdsupra.com/legalnews/most-ai-national-security-regs-likely-3129059/
[3] https://www.lexology.com/library/detail.aspx?g=df6aeca0-04d5-48d6-a0df-110cf64e82a7
[4] https://www.mintz.com/insights-center/viewpoints/54731/2024-11-14-ai-under-second-trump-administration-ai-washington
[5] https://interestingengineering.com/ai-logs/donald-trump-us-president-ai-regulation
[6] https://www.jdsupra.com/legalnews/ai-under-a-second-trump-administration-5739549/
