How AI Regulations May Change With New Trump White House

President Donald Trump is expected to loosen or repeal President Joe Biden’s artificial intelligence regulations after taking his oath of office Monday (Jan. 20).

His publicly stated views are encapsulated in the Republican National Committee’s 2024 platform , which called Biden’s AI policy one that “hinders AI innovation.”

However, the kind of sweeping changes Trump’s rhetoric implies will likely be translated into more nuanced revisions, said Duane Pozza , a former Federal Trade Commission assistant director who is now a partner at law firm Wiley Rein and co-chair of its privacy, cybersecurity and data governance practice. For example, Biden’s October 2023 executive order has now been implemented in federal agencies and might be harder to unravel, he said.

“Most of it is already in place,” Pozza said in an interview with PYMNTS. “So, the real question … is, ‘What does the new administration do in terms of the work that’s already started at the agencies?’ Does it try to roll them back? Does it pause them? Does it try to do different things around AI?”

While Pozza said he believes Trump will impose fewer regulations on AI than Biden, he pointed to the first Trump administration’s 2020 executive order that tasked federal agencies to use AI for the benefit of the American people. He said the same people would be returning in the second Trump term.

As an example of Trump’s potential nuanced changes to AI rules, Pozza pointed to the FTC. Under Biden, the FTC has been active in bringing enforcement actions against tech companies that allegedly made false, fraudulent or overstated claims about AI.

“Those kinds of approaches and enforcement actions appear likely to continue,” he said. “The new leadership at the FTC remains concerned about deception in the marketplace.”

States Will Likely Step Up

Biden’s October 2023 executive order instituted government scrutiny of powerful foundation models and required action on the part of tech companies developing such models. These actions include letting the government inspect models before deployment, conducting red-teaming tests to ensure the deployment of safe and secure AI systems, and keeping the model weights of any foundation models secure.

In January, Biden followed up with two more executive orders on AI. One order allows the leasing of federal lands for the building of AI data centers and the other expands chip export control rules to more than 120 nations in the name of national security . Biden also expanded export limits of advanced AI chips, essentially grouping nations in terms of access.

However, Pozza said Trump will generally be softer on regulations that affect AI innovation. His team will be “very focused on finding ways to unlock AI innovation and encourage private-sector innovation on AI.”

With this change in presidential positioning toward less regulatory oversight of AI, Pozza said he believes individual states will take up the slack.

“We expect states to get more active,” he said. “There’s a slew of bills either already proposed or about to be proposed. That’s something to watch.”

Thus far, Colorado is the only state with broad AI regulations, while most other states target harmful uses of AI, such as deepfakes, Pozza said. In 2024, at least 45 states, Washington D.C., Puerto Rico and the Virgin Islands introduced AI bills , according to the National Conference of State Legislatures , whose members are state legislators and their staff. Among these bills, 31 were adopted or enacted.

As for whether Trump will let Biden’s chip export control rules stand, Pozza said the jury is still out on that issue. Trump is concerned about national security issues and trade competition with China, which is the focus of the Biden export controls on advanced AI chips.

David Sacks and the Wild Card

Trump’s appointment of venture capitalist David Sacks , who was a co-founder of PayPal along with Tesla and SpaceX CEO Elon Musk and venture capitalist Peter Thiel , to oversee AI and crypto also hints that he will bring a “pro-innovation, pro-startup” approach to AI and regulations, wrote Ken Kumayama , Stuart Levi and William Ridgway , partners at the law firm Skadden, Arps, Slate, Meagher and Flom specializing in AI, in a blog post last week.

One wild card is Musk, the partners said.

“Musk … has long expressed concerns about the unchecked power of AI..,” they wrote.

Specifically, Musk has been warning against superintelligent AI becoming an existential threat to humanity, which sparked his lawsuit against OpenAI becoming a for-profit entity since it could more easily raise capital for AI development compared to its prior status under a nonprofit.

Musk, who was a co-founder of OpenAI in 2015, famously started the company as a nonprofit to be a counter against Google , which at the time had most of the AI brainpower. Musk was concerned that a for-profit company like Google would get to control AI’s future. He put together a team with OpenAI CEO Sam Altman and other AI engineers like Ilya Sutskever to make AI openly available so the public can counter Google. But Musk and OpenAI parted ways after Musk reportedly wanted control.

However, Musk has complicated his motives by forming his own for-profit AI company, xAI , “which he said will not have any guardrails against disinformation and hate speech,” the partners said, adding that these views “may help to shape the Trump administration’s posture on AI.”

Thus far, Musk’s official involvement in the administration has been to cut government spending as a leader of the volunteer Department of Government Efficiency .

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