President-elect Donald Trump’s return to the White House, coupled with Republican control of Congress, will reshape the technology sector and artificial intelligence regulation at both the federal and state level. Trump has already promised to repeal President Joe Biden’s October 2023 AI executive order, has tapped David Sacks as his “AI czar,” and has stated his goal of prioritizing accelerating AI innovation and competitiveness.
What does this mean for industry stakeholders? Expect a hands-off regulatory approach, as the Trump administration will likely favor accelerated industry growth to keep the US competitive globally. But stakeholders will need to monitor state AI legislation, as key states such as California and New York may move to address issues such as safety and ethics.
Past and Present
During Trump’s previous presidency, AI policy largely centered on boosting the US’ competitive edge in innovation. His administration in 2019 launched the American AI Initiative, which aimed to ensure US leadership in AI research and development. But the initiative wasn’t well defined, leading to criticism that it lacked sufficient funding and regulatory depth to address the broader challenges posed by rapidly evolving AI systems.
Biden adopted a more proactive approach, emphasizing responsible innovation, ethical oversight, and international collaboration. Major initiatives included:
- The blueprint for an AI Bill of Rights, which outlined principles for protecting civil rights, privacy, and democratic values in AI development and deployment
- The Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, which established a government-wide effort to guide responsible AI development and deployment through federal agency leadership, and engagement with international partners
- Promotion of accountability in AI systems through the National AI Research Resource Task Force and increased funding for AI R&D
- Focusing on AI’s national security imperatives
Federal Legislation
A bipartisan House task force released a report on AI policy last month, highlighting guiding principles and providing forward-looking recommendations for the new Congress.
Last May, the Senate’s AI Working Group released its own roadmap for AI policy and legislation after hosting a series of insight forums in 2023. And although there have been reports of bipartisan momentum within both chambers to pass AI legislation in the “lame duck” session of Congress, no clear pathway for comprehensive federal AI legislation has emerged.
State Legislation
State efforts to regulate AI also continue to advance. Lawmakers across the US introduced hundreds of state AI bills this past year, including those signed into law in Colorado, Utah, and California.
Most state efforts so far have been narrow in scope, largely focusing on preventing discriminatory outcomes in the use of AI systems, protecting intellectual property, combating deepfakes, and addressing other harms presented by generative AI tools. But broader efforts at regulatory approaches have been attempted in California.
Potential Federal Policies
With this backdrop, Trump faces a vastly different landscape from his prior term. Stakeholders can expect Trump’s approach to AI to remain focused on industry innovation, international competitiveness, and national security.
Federal AI policy will likely become less constrained from a federal regulatory perspective. Andrew Ferguson, Trump’s pick to head the Federal Trade Commission, has pledged to dramatically scale back or halt the commission’s AI enforcement.
Antitrust efforts could diminish, and the industry can expect a stronger endorsement of emerging technologies such as blockchain as a strategic economic tool. While Trump has historically emphasized cutting government spending, sustained investments in AI R&D and infrastructure may become crucial to maintaining the US’ competitive edge.
China has emerged as a global leader in AI, leveraging state-led investments and a vast data ecosystem to drive innovation. Trump’s tough stance on China suggests that his administration would intensify efforts to curb Chinese influence in AI.
Such efforts could include expanding export controls and sanctions to limit China’s access to advanced AI technologies and hardware developed in the US; increasing federal funding for AI research to maintain US leadership and reduce reliance on foreign technologies; and collaborating with allies to develop shared norms and standards for AI governance, countering China’s efforts to shape global AI regulations.
AI is increasingly viewed as a cornerstone of national security, with implications for defense, intelligence, and global power competition. The Biden administration recently released a memo outlining why AI is a national security priority for the US.
The incoming Trump administration will likely need to prioritize AI as a tool to enhance US military capabilities and counter threats from adversaries. The Department of Defense has already recognized AI’s potential to revolutionize warfare, from autonomous drones to predictive analytics.
Under a Trump administration, defense-related AI initiatives could include streamlining acquisition processes to integrate AI technologies into defense systems more rapidly; developing AI-powered tools to detect and respond to cyber threats, ensuring the security of critical infrastructure and defense networks; and establishing clear guidelines for the ethical use of AI in warfare.
Challenges and Opportunities
While Trump’s emphasis on deregulation and economic growth could accelerate AI innovation, it may also exacerbate risks associated with inadequate oversight. Trump’s polarizing leadership style also could hinder international collaboration on AI governance, limiting the US’ ability to shape global standards.
Balancing national interests with the need for multilateral cooperation will require a precise strategy. The next Trump administration will inherit an AI landscape marked by rapid innovation, heightened geopolitical tensions, and growing public concerns. Addressing these challenges will require a mix of fostering innovation, ensuring safety and accountability, and protecting national security.
Federal policy must also evolve to meet the demands of new AI breakthroughs, such as those around autonomy, agency, reasoning, and problem-solving. State legislation may also continue to play an important role in managing the immediate harms and risks current forms of AI present, such as those relating to discriminatory outcomes and IP protections. An AI-driven world will require a federal focus on adaptability, collaboration, and ethical stewardship, and an active partner at the state level.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author Information
Peter Stockburger is office managing partner at Dentons and the US lead for the firm’s AI advisory team.
Daniel A. Schnapp is partner at Dentons, focusing on intellectual property and complex commercial litigation.
Sara Gates is a managing associate in Dentons’ intellectual property and technology group.
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