Is the White House’s AI Policy Coherent?

And why is the President risking a revolt over AI?

Two breaking news items from Washington have left me with more questions than answers.

Item One: Earlier today Trump revived the widely-reviled idea of keeping states from regulating AI:

People expect an Executive Order to follow, quite possibly illegal, banning states from regulating AI. Since there is almost no federal law around AI, this amounts to leaving the industry mostly unregulated.

Item two, also from earlier today was this, reported by The New York Times:

The only excuse I can see for the White House’s escalating efforts at leaving AI all but entirely deregulated (unlikely virtually any other industry from medicine to food to airplanes to cars to constructions) is some sort of race with China.

But if we are racing with China why are we suddently allowing Nvidia to sell them H200s, among the most powerful (though not quite the most powerful) chips in their line? I just don’t get it.

A cynic might say that the real idea of the deregulation is perhaps to help Silicon Valley AI companies make more money out of AI (without regard to impact on the country’s citizens). But by selling the chips to China isn’t Trump’s arming their competitors?

Color me baffled.

Meanwhile, both policies face strong bipartisan resistance. The Times reports that last week “six senators, including Pete Ricketts, a Republican from Nebraska, and Chris Coons, a Democrat from Delaware, introduced a bill that would limit the sale of A.I. chips to China”. A few months ago the Senate voted 99-1 against full federal preemption of statewise AI laws. Even people far to the right like Florida Governor Ron Desantis have protested the proposed preemption of states’ rights vigorously.

The American public doesn’t want this, either. Every poll I have seen shows the vast majority of the public wanting AI regulation, and I doubt people will be fond of selling fancy chips to China. Trump is risking fracturing MAGA, and alienating the public, at a moment when his approval ratings are falling.

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If things go wrong – whether that means the bubble bursting (with possible harm to the economy), or China beats the US in the LLM race, or some massive AI-caused disaster such as a giant cyberattack — Trump (and Sacks) will own the mess.

By the end of the week (when the Executive Order is expected), American citizens will have almost no route to protection from the consequences of AI, and with the sale of H200s, American AI companies (aside from Nvidia) will also took a hit.

If you can see how to make sense of all this, please drop a note in the comments. I sure don’t.

Update, one reader, Haniya Rae, gives a plausible account in the comments:

Nvidia doesn’t have any more buyers to sell to because most companies are finding out that LLMs can’t solve all their problems, plus Google TPUs, as you mentioned, mean their dominance is questioned. Nvidia is also propping up the stock market at the moment. China is the only way to keep this dance going for a little while longer.