"Washington’s Influence" May Determine the AI Race
Brian J. Chen: Director of Policy at the Data & Society Foundation.
Five months into his second presidential term, Donald Trump has already begun a new era of imperial technological governance, where both local and foreign regulatory authorities are increasingly subjected to an American administration dominated by major tech companies.
Silicon Valley has nurtured its political influence through vigorous lobbying and strategic presidential appointments. Now, despite the technology industry’s aversion to Trump’s tariffs and political priorities, its efforts are starting to bear fruit, as Republican leaders are working to obstruct tech regulation not just in Congress—where legislative progress has always been unlikely—but also at the state level and around the globe.
As part of Trump’s "great beautiful" budget bill, lawmakers are considering a proposed ten-year ban that would prevent American states from regulating artificial intelligence. This proposed ban could undermine efforts to enforce transparency in managing AI systems, protect consumers from algorithmic price-fixing, and limit worker surveillance. While it is unlikely to pass procedural rules in the Senate, Republican Senator Ted Cruz has vowed to pursue similar bans in future legislation.
From the perspective of the tech industry, federal preemption has long served as a reliable strategy to avoid troublesome state laws. It aligns with Republican efforts to concentrate AI regulatory power within the White House. This may explain why the ongoing dialogue surrounding the proposed ban focuses largely on geopolitical concerns rather than states’ rights.
For instance, in a congressional hearing about the proposal, lawmakers and expert witnesses transformed what should have been a discussion about the role of state councils in Sacramento and Denver into fiery denunciations of overregulation in Brussels and authoritarianism in Beijing. If the U.S. ends up with a patchwork of state AI laws, American companies will struggle to foster innovation and compete with China.
During that hearing, witnesses repeatedly referenced leading EU regulations, such as the General Data Protection Regulation and the AI Act, arguing that regulatory overreach has hindered Europe’s ability to produce world-class tech companies. The message was clear: to defeat China, the U.S. must not become another Brussels.
But is Brussels still Brussels? Before any discussion on AI preemption, the Trump administration began pressuring the EU to ease tech regulations such as the Digital Services Act and the Digital Markets Act. In February, during a speech by U.S. Vice President J.D. Vance at a summit on AI in Paris, he condemned the “burdensome international rules” imposed on American companies. At the same summit, French President Emmanuel Macron expressed his desire to “simplify” EU tech regulations and “realign” them with the rest of the world.
Some indicators suggest this strategy is proving successful. The EU’s recently proposed AI Action Plan reflects a more lenient approach to regulation, and law enforcement officials are working to reduce fines imposed on American tech companies. On the other hand, those same companies are continuing to pressure the European Commission to keep AI rules “as simple as possible.” Tech regulation remains a contentious issue in Trump’s trade policy. In May, Trump threatened to impose 50% tariffs on EU imports while negotiations over digital taxes and tech regulation remained stalled.
American politicians often depict the “Brussels Effect” as a cautionary tale largely based on the flawed notion that the EU, obsessed with setting de facto global standards, has overestimated its leverage and ultimately undermined its tech sector. But we are now witnessing the emergence of the "Washington Effect": a shrinkage of tech governance across various levels—local governments, states, and multilateral bodies—aimed at enhancing U.S. corporate supremacy, with regulatory power increasingly concentrated in the executive branch of the federal government.
In the pursuit of global technological dominance, former President Joe Biden—an ardent advocate for a U.S.-led liberal world order—has worked with allies to coordinate “AI safety nets” and reshape tech production lines. In contrast, as historian Jake Werner noted, “Trump sees the economy as a marketplace where those with bargaining power press those without for profits, not as a supply chain where power accumulates in strategic nodes tied to scarce goods or technologies.”
By opting to lift restrictions Biden imposed on semiconductor exports, the Trump administration demonstrated that it sees no need to leverage access to advanced graphics processing units (GPUs) to bring other nations to the negotiating table; nor does it show much interest in multilateral coordination. In discussing the recent tariff announcement on the EU, Trump was notably straightforward: “I’m not looking for a deal. We’ve set the agreement.”
The same logic manifests in U.S. domestic policy. Biden’s “legislative meetings” that brought state lawmakers together to address critical national issues have disappeared. Instead, Republicans wish to transform the White House into a centralized clearinghouse for all AI policies, even if it means preventing state officials from providing protections against arbitrary practices.
These measures complement each other: while U.S. officials push foreign governments to ease pressures on American companies, Congress is moving to entirely prevent oversight at the state level. In short, Washington is depicted as the sole place where decisions can be made.
Ironically, federal authority, even in an era of regulatory rollback, will shape the path of American technology in the future. “Winning the AI race,” a largely ambiguous and elusive goal, will depend on American state power and political coercion as much as on private investment. Regardless of the slim prospects for multilateral cooperation, Washington’s influence is rapidly diminishing.
A significant part of the outcome will depend on China’s response. However, barring those who will directly benefit from the technological arms race, the outlook is bleak: as nationalist rhetoric intensifies, the interests of dominant tech companies increasingly overshadow the vision of an innovation system serving the public good.
Indeed, the United States loves to portray itself as the champion of democracy and the world’s foremost innovator. Yet, its strategy for achieving supremacy in AI relies on imperial overreach and unbridled executive power. The Trump administration does not favor red states over blue, nor does it cooperate with European allies to contend with China. Instead, it seeks to wrest power from state apparatuses and foreign partners alike, prioritizing predation over effective governance.
