President Donald Trump revoked the Biden administration’s sweeping executive order governing artificial intelligence, potentially clearing the regulatory decks for AI stocks from Nvidia (NVDA) to Palantir (PLTR).
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In one of his first moves as 47th President, Trump rescinded a 2023 order that aimed to reduce the risks AI poses to consumers, workers and national security.
The order had forced developers of AI systems to share the results of safety tests and other key information with the U.S. government, if they were seen as posing a risk to national security, the economy, workers or consumers.
Resulting from this was the U.S. AI Safety Institute, sitting within the Commerce Department, to build voluntary guidelines and best practices for the technology. This helped companies identify and correct flaws in AI models, such as biases.
Trump Order Could Support U.S. AI Sector
While Trump did not provide details on what may replace the Biden-era regime, it’s likely that the new administration will take a more laissez-faire approach to regulation, potentially reducing oversight on AI companies such as C3.ai (AI) and Alphabet (GOOGL).
During the campaign, Trump criticized Biden for taking a heavy-handed approach to the regulation of AI and hindering innovation.
And big tech companies working on AI have been cozying up to the president. It was no surprise to see the likes of Meta Platforms (META) founder Mark Zuckerberg, Amazon (AMZN) founder Jeff Bezos, and GOOGL CEO Sundar Pichai standing alongside Trump at his inauguration.
In December he announced venture capitalist and former PayPal Chief Operating Officer David Sacks as his AI and crypto czar, saying his appointment would steer the U.S. away from “big tech bias and censorship.”
However, the repeal of the Biden order throws into doubt the future of AI regulation in the U.S. just as other jurisdictions begin to tighten up on this area.
The European Union last year passed its AI Act, a comprehensive set of guardrails for AI developers. Looser regulation in the U.S. may foster greater innovation but could come with greater risks.
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