New U.S. Administration Reverses AI Order, Signals Hands-Off Approach

President Trump's administration has repealed Biden's AI executive order, halting federal safety and transparency mandates in favor of more limited regulation.

Trump rescinds Biden’s AI executive order, halting federal safety and transparency mandates.
Future U.S. AI policy remains unclear, with the administration expected to favor limited regulation.
States continue to lead on AI governance, creating a patchwork of rules.
The global AI race intensifies, with the EU advancing robust regulations.

President Donald Trump’s administration has repealed a key executive order issued by President Joe Biden that aimed to regulate artificial intelligence through enhanced oversight and transparency measures, according to a Bloomberg Law report.

The Biden order, signed in 2023, required AI companies to share safety test results with the federal government and established the U.S. AI Safety Institute to create voluntary guidelines for the technology.
With the repeal, these efforts are effectively halted, signaling a shift toward a less interventionist approach.
Trump’s administration has yet to outline a replacement framework but is likely to prioritize fostering innovation and competitiveness, particularly against global rivals like China.

Shift in Federal Oversight

Biden’s AI order was designed to address growing concerns about the risks of unregulated AI, including potential misuse in critical sectors like healthcare and law enforcement.

However, Trump criticized the order as overly restrictive, arguing that it could stifle technological advancement. David Sacks, a vocal critic of tech regulation, has been appointed as the administration’s crypto-AI czar, reinforcing expectations of a hands-off regulatory stance.

This marks a notable departure from Biden’s policy, which leaned heavily on collaboration with tech companies to ensure safety and transparency.

U.S. Lags Amid Global AI Race

The repeal comes as other nations, particularly the European Union, forge ahead with comprehensive AI regulations. The EU’s AI Act bans certain applications, such as facial recognition, and imposes strict oversight on high-risk AI systems.

Trump’s administration has indicated it will maintain a focus on U.S. AI competitiveness, citing national security and economic priorities. Proposals include bolstering domestic energy production to meet AI demands and attracting foreign investment in AI infrastructure.

States Step In

With federal AI policy in flux, individual states have taken the lead in regulating the technology.

California has introduced measures targeting AI deepfakes and enhancing transparency around training data.
Other states, including Colorado and Illinois, have passed laws to combat algorithmic discrimination in hiring.
New York is set to require businesses to report AI-related job losses.

This decentralized approach has created a patchwork of regulations, complicating compliance for AI companies operating across jurisdictions.

The AI order repeal raises questions about the future of AI governance in the U.S. While the move may accelerate innovation, it also leaves gaps in oversight at a time of heightened global focus on ethical AI development.