As President-elect Donald Trump and his running mate J.D. Vance prepare to take office in January, questions over their policies on a slew of issues have emerged—among them, technology and artificial intelligence.
The former president did not speak extensively about those issues on the campaign trail, instead relying on his platform of tariffs, taxes, jobs and the economy to carry him back to the White House. But like all administrations leading up to his second term, Trump and his advisors will be tasked with taking a stance on the state of the rapidly evolving tech space.
Experts expect that Trump’s second term may usher in an era of deregulation for the largest players in the technology industry, particularly based on an insistence to defeat China in the battle over which country reigns supreme on AI innovation.
Uncertainty lingers over how that may play out—especially when considering the marriage between technology, trade and the economy. Agencies and smaller regulatory bodies—including state and local governments—may be tasked with the burden of paving their own way as a result.
The ‘Cheerleader in Chief’
Experts have projected Trump may have a backseat driver riding all the way to the Oval Office: Elon Musk, CEO of Tesla, has been a close crony of the president-elect over the past several months.
Michelle De Mooy, director of the Tech & Public Policy Program at Georgetown University’s McCourt School of Public Policy, projected Trump may have a whisper in his ear in the Oval Office when it comes to technology.
“Honestly, I think [Trump and Vance] will take their cues from their Cheerleader in Chief Elon Musk,” she said.
While Musk may not have an official tech-related role in the Trump administration come January, De Mooy expects that he will still influence how the administration governs. She expects his priorities could be around breaking down environmental regulations that could hinder the rapid development of data centers, which are historically detrimental for greenhouse gas emissions.
She also noted that Musk may recommend a deviation from the Biden-Harris administration’s early attempts to align with the European Union on technology policy.
“My guess is that Musk would be advising [Trump] to move further away from the model of EU regulations around AI,” she said.
The EU Effect
The regulation De Mooy referenced is the EU AI Act, which was the world’s first comprehensive AI law. But critics have said it’s too restrictive and could stifle innovation if enforced strictly.
The Biden-Harris administration’s 2023 Executive Order on the Safe, Secure and Trustworthy Development and Use of Artificial Intelligence—better known as the AI EO—has been seen by some as a first step toward aligning with the principles outlined in the EU AI Act, which experts projected would cause a domino effect across various jurisdictions.
Trump has, on several occasions, promised to repeal the AI EO—saying on one occasion that it would do so on “day one” of his second presidential term. De Mooy and Megan Shahi, director of technology policy at the Center for American Progress, said they expect him to follow through with that.
“We can probably expect a repeal of the EO as a fairly straightforward first step that the administration will take,” Shahi told Sourcing Journal.
But what that means may be less straightforward; much of what the AI EO required from various agencies inside the federal government has already been carried out—from the Department of Labor (DOL) releasing guidelines for employers on the use of AI, to the sprawling work the National Institute of Standards and Technology has undertaken on a variety of issues. It’s not immediately clear how guidance already set forth by agencies would be treated by a Trump administration, particularly because the overwhelming majority of it is not legally binding.
And though Americans in general seem to support regulation for AI, particularly as fears over data privacy and job security loom, De Mooy said it’s unlikely to be a priority for Republicans in Congress, regardless of which party ultimately gains control of the House of Representatives.
“They’ve just won a huge election…and they’ve won it on the price of eggs and gas. So going for something like a big package on AI doesn’t make sense, and would not give them much in terms of a return,” she explained.
Shahi agreed that, even if Trump and Vance repeal the Biden-era EO, it’s unlikely to be replaced by legislation instigated by Republicans, particularly as Senator Ted Cruz (R-TX) steps into the role of chair of the Senate Committee on Commerce, Science and Transportation, which regulates Big Tech.
“Broadly, we’re unlikely to see a legislative package on AI come through, especially with Cruz now at the head of Senate Commerce. The Senate has flipped back to the Republicans, so the remit there is broader than it even was before, so any hopes for a broad package on AI, I think, are unfortunately dashed.”
But why? Beyond pure politics, the answer is likely dual pronged: a longing from the Republicans to stick it to China and a responsibility to Big Tech in thanks for its support throughout the election cycle.
China and Big Tech
Whether based in fact or not, much of the chatter among Trump and other Republicans around AI-focused legislation has been led with a concern over stifling innovation and losing free speech. Particularly the piece about innovation has a direct link to the AI race the U.S. continues to pursue against China, De Mooy said.
“When it comes to China, I think the primary tactic and stance of most of the tech industry—and my guess would be Elon Musk’s, too—is about competition. It’s about making sure that the U.S. would avoid regulating AI, so that the U.S. would maintain a competitive advantage over China,” De Mooy noted.
The strategy for developing such an advantage over China may not come directly via technology policy—or lack thereof, De Mooy said. It’s also likely to include economic, trade and tariff policy, which Trump had been vocal about throughout his campaign.
On the campaign trail, the Republican front-runner noted that he plans to implement a 60 percent tariff on goods imported from China. But the Asian country manufactures—or has a part in making—a huge proportion of chips and hardware components needed to continue developing AI and to build data centers and hardware to support the proliferation of technology spawning.
While both the Trump administration and the Biden administration have made pushes to decrease the U.S.’s reliance on China for technological components, the U.S. still lacks the manufacturing prowess to make nearly the volume of pieces it needs to support consistent growth in the technology sector—or even to keep pace with current demand. Adding a 60 percent tariff to the price of those components could stymie companies’ ability to push forward.
De Mooy said she’s not so sure that Trump will be able to move the needle in the way that he’s threatened when it comes to tariffs on goods imported from China, particularly when it comes to the technology industry.
“It seemed as though a lot of that [tariff talk] was rhetoric—trying to get concessions from China, which is in an economic recession right now anyway, so in a vulnerable place. It’s more about…trying to assert dominance, because it doesn’t make any kind of math sense to do something like that, and I’m sure the technology companies know that,” she said.
Sarah Oh Lam, senior fellow at the Technology Policy Institute, said whether the tariffs end up being realized or not, technology companies may further shift their component sourcing to other countries.
“There are policies that the president and Congress can make to increase manufacturing in the U.S., but that takes time to start building and have factories here, and our labor costs are so much higher than abroad. It might just mean more companies will be manufacturing in other countries than China, like Vietnam and Mexico. That’s the difference between politics and policy—we’ll see what actually happens and what adjustments are made,” Oh Lam told Sourcing Journal.
Deregulation’s yields
Regardless of the reason for potential deregulation of technology—AI in particular—experts said it could have myriad effects, including what Oh Lam called “unintended consequences or secondary effects.”
Some of the work that has recently been done at the agency level around AI focuses on bringing employees and workers along with technology when implementing it across organizations.
Shahi said that, should a deregulatory attitude actually prevail throughout the Trump administration’s second tenure, it’s possible that AI and automation could run rampant, creating unwanted strain on certain sectors and jobs within them.
While the full effect of AI, automation and emerging technologies is far from fully realized and will continue to move over the coming years, Shahi said there could be a reckoning point on labor within Trump’s next term.
“That’s a tension that the Trump administration will have to grapple with—they’re running on a platform of bringing jobs back and reinvigorating the working class…but with that, they also want a deregulatory approach that lets innovation run free and removes authority from the FTC. Those things, if not managed appropriately, can absolutely be at odds,” Shahi warned.
And as a result of a deregulated federal environment, states may be forced to make their own laws, in the same way that many states have passed their own legislation on climate and environment in the absence of sweeping federal action.
That work has already begun.
“I think we’re going to end up with a patchwork system where states fill the void that results from a federal deregulatory approach, and we’re already seeing it,” Shahi said.
California, Colorado, Tennessee, Utah and other states have already enacted laws related to the technology, albeit through different lenses.
De Mooy said that could make compliance difficult for small-to-medium-sized AI companies just getting a start in a highly competitive industry, but noted that the major players in the AI space shouldn’t face as many issues complying.
“The big companies have very deep pockets to pay lawyers to handle that for them, so to the extent that it will interfere with them continuing to make big frontier models, etc., I just don’t think it’s going to impact them very much. They will continue just fine,” De Mooy told Sourcing Journal.
While the experts largely expect little legally binding movement on AI, they did note that other, more bipartisan issues—in particular, data privacy and children’s protection laws—could see movement in Congress over the coming years.
Though laws passed through legislative bodies are one way to regulate technology, rules and stipulations put forth by federal agencies also bear legal responsibility in many cases. Though Lina Khan, the chair of the Federal Trade Commission (FTC), has faced wide-ranging criticism from both sides of the aisle for her fervor on Big Tech-related issues, her work has also shown the power of an agency.
Oh Lam said she expects agency appointments could significantly impact policy on technology over the next four years, particularly if Congress and Trump fail to make significant moves. She specifically called out the importance of the Office of Science and Technology Policy (OSTP); the Office of Information and Regulatory Affairs (OIRA); the Office of Management and Budget (OMB) and the Securities and Exchange Commission (SEC), among others.
“[Inside agencies,] the staff who are attuned to the tech policy issues will be important. Personnel is policy, [and] hopefully, they’ll be finding good people to be in those positions, because those positions can really shape a lot of tech policy, efforts and resources,” Oh Lam said.
