Former President Donald Trump has largely rejected calls for increased government regulation of AI, prioritizing the rapid advancement of the technology to outpace China. He characterized fears about AI safety as a "hoax," suggesting that the only control needed for AI is a "STRONG AND SMART (High IQ!) PRESIDENT." Trump also claimed a "SICK conspiracy" against AI and data centers, which he believes only benefits China.
Trump's stance comes as prominent AI industry figures, including the CEOs of Anthropic, OpenAI, and xAI, have issued stark warnings about the dangers of unchecked AI development and called for a coordinated slowdown in model releases. These warnings have prompted a shift in Washington, with even veteran socialist US senator Bernie Sanders and right-wing activist Steve Bannon advocating for greater AI guardrails. Mike Johnson, the Republican Speaker of the House, has also called for a meeting with AI bosses at the White House to discuss the technology.
While Trump's vice-president, JD Vance, has indicated some additional AI regulation might be necessary and supported a consensus approach between Congress and the administration, Trump himself remains largely opposed to new regulations. However, a growing number of Republicans are now supporting measures to curb AI deployment, including bans on data center construction. Despite these bipartisan calls for oversight, Congress faces a time crunch before recess, and a consensus on specific regulations may not emerge until January.
The broader financial markets have also reacted to the AI concerns. The call by major AI companies for a development slowdown contributed to a fall in stock markets. Additionally, yields on 10-year US Treasuries reached 5% for the first time since 2023, influenced by surging oil prices, mounting public debts, and significant debt issuance by tech companies financing the AI boom. This rise in yields is expected to increase mortgage rates and make capital more expensive for businesses, potentially pressuring corporate America.
