Silicon Valley killed AI rules, now it wants them back

The artificial intelligence sector that poured millions into Donald Trump’s campaign with the expectation of unfettered growth is now reversing course and calling for structured government oversight. According to a Friday report from Politico, executives at leading AI companies have concluded that the administration’s unpredictable, case-by-case management of model releases is causing more harm than the regulatory framework proposed by the Biden White House.

The about-face has been swift. Trump entered his second term buoyed by a wave of Silicon Valley donations from billionaires who argued that Biden’s AI safety policies would strangle American innovation. During his first year, the president concentrated on preventing state-level regulation of the technology and signed a voluntary executive order on June 2, requesting that companies submit their models for a 30-day review before public release.

That voluntary system was quickly rendered obsolete. On June 12, the White House imposed export controls on Anthropic’s Mythos 5 and Fable 5 models after Amazon’s CEO raised security concerns with the Treasury Secretary. This week, the administration pressured OpenAI to limit the launch of its newest model, Sol, to roughly 20 government-approved partners. This marks the first instance of a U. S. company launching a frontier model under a government-managed access list.

One senior AI executive, speaking anonymously to Politico, described the situation as “a de facto European-style licensing regime.” Paul Lekas, head of global public policy at the Software and Information Industry Association, which represents major AI firms, emphasized that there is “a real need for a formal process.” He added that the industry wants to avoid releases based on “an ad hoc process and a one-off license.”

Industry representatives also expressed reluctance to press the White House for clarity. “It feels like they’re walking on eggshells a little bit,” said one AI policy adviser who works with major frontier labs. Companies fear that aggressive lobbying could trigger further export controls or other regulatory retaliation.

Saif Khan, who served as senior adviser on critical and emerging technology at the Commerce Department under Biden, described the Trump approach as an overreaction rooted in earlier dismissiveness. “Because there has been some dismissiveness of the risks, there’s been no preparatory work, no hiring of experts,” Khan told Politico. He characterized the result as “opaque, almost vibes-based.”

Khan argued that the administration’s actions amount to “an almost complete moratorium on new releases” that will “start seriously impacting companies’ bottom lines.” He called this far more damaging than anything Biden envisioned. The Biden administration’s final rule would have imposed export controls on chips and AI model weights for certain countries, but it never attempted to block domestic releases.

Dean Ball, a former Trump administration official who authored the White House AI Action Plan and is joining OpenAI as head of strategic futures on July 6, acknowledged the tension. He said the administration’s concerns are “100 percent legitimate” but that “they are likely overreacting to these legitimate concerns.” Ball added that he is glad the White House is now taking AI safety seriously, even if the execution is flawed.

On Friday, the administration partially rescinded the Anthropic export ban, allowing Mythos 5 to be shared with more than 100 approved companies. However, Fable 5 remains blocked for reasons the government has not disclosed. An OpenAI executive told Politico that the industry expects the administration to finalize its June 2 executive order soon, replacing the current crackdown with the voluntary vetting framework it originally outlined.

Lekas said the tech industry is developing “a coordinated push for an actual framework” for advanced AI rules and wants Washington to codify it, whether through executive order or legislation. He warned that if AI companies cannot agree on a standardized approach to safety, they will continue to receive the same unpredictable treatment.

White House spokesperson Liz Huston defended the president’s record, citing fast-tracked permits for AI infrastructure and the executive order aimed at stopping state-level regulation. “President Trump has clearly and repeatedly articulated his goal: ensure continued American dominance in AI,” Huston said.