Rumors began swirling in Washington on Wednesday about a major policy change: The White House will reportedly issue an executive order on Friday that will finally preempt state artificial intelligence laws, transferring those regulatory powers to the federal government. The minute the information leaked onto the Internet, lawyers and politicians began scrutinizing its every suggestion. Much of this seemed politically unfeasible; there were even more that seemed too broad and possibly illegal. There were many agencies that were suddenly shut down.
But most importantly, they noticed how much power would be transferred to a certain South African tech billionaire turned special government official who had worked his way into the West Wing – not Elon Musk, but another one.
In each section of the draft executive order, President Donald Trump directed Cabinet secretaries and agency heads to immediately release reports and guidance on how to punish states for AI laws within the next 90 days. In the attorney general's case, they had 30 days to create an entire legal task force to sue these states. When executing an order, each of them will have to consult with David Sachs, a special advisor on artificial intelligence and cryptography and one of the most influential technology venture capitalists in the world.
“I don't want to say it was a power grab. That's too strong a term,” said a technology policy adviser close to the White House. “But it’s definitely kind of a consolidation of his power.”
The MAGA universe instantly exploded. War room Host Steve Bannon, who helped thwart a previous attempt to pass an AI moratorium in the Senate this year, devoted part of his Friday show to the draft executive order. In Congress, Democrats publicly rebelled; Technically skeptical Republicans quietly prepared their statements. The political world of artificial intelligence immediately published reports illustrating how much power would be pulled into the hands of the White House. The order was planned to be signed on Friday, but this never happened.
Outside the White House, the AI order, if signed, would have no legal effect. But inside the White House this would be treated as an imperial mandate. Trump's executive orders are historically designed to force his subordinates to do his will. immediatelyLegality be damned, and the consequences are usually irreversible by the time the courts rule his actions illegal. For example, his tariff order may soon be overturned by the Supreme Court, but not before it causes trillions in economic losses and damage to US foreign relations.
When asked for comment, the White House press office emailed to Caroline Leavitt declined to comment on the record, instead only emphatically asking us to identify our sources.
And from there it could be used as a threat against the states. “I suspect that if it is effective, the most effective part of it will be the chilling effect on state law,” said Charlie Bullock, a senior fellow at the Institute for Law and Artificial Intelligence. Edge. One section of the bill would allow the government to withdraw any federal funding from states in violation of the order — not just rural broadband grants, which have been used as leverage in previous preemption battles, but anything from highway funds to education grants. “Even if [a state] may win a court case to force them to provide them with this funding, it will end up taking a long time. This may convince states.”
Thus, in one fell swoop, this would turn Sachs into the gatekeeper of US AI policy.
While there are several officials in the White House with ties to the tech industry, Sachs, who has temporary government employee status, is seen by Washington insiders as Trump's closest link to prominent tech executives who consider him a colleague. (Although Vice President J.D. Vance worked in Silicon Valley before politics, he never joined the three-comma club.)
“He's trying to maintain the competitive advantage of America as a whole, and you could say, in a more selfish way, he's trying to protect the tech industry. [with] more local These are my people approach,” said a technology policy adviser close to the White House.
But Sachs also tried to neutralize a third, internal threat: political forces within the executive branch, both the progressive left and the MAGA hard right, who were hell-bent on limiting his influence.
Even in this hyperpartisan climate, the left and right share a common goal in regulating the excesses of Big Tech and will even publicly join forces to oppose them. And this, apparently, also happens behind the scenes. As a technology policy adviser described it, the informal internal alliance against Sachs consisted of holdovers from the Democrat Biden administration “who over-regulated and wanted to break up tech companies” as well as far-right MAGA officials in his current administration “who don't trust technology and similarly want to regulate tech companies – either at the state or federal level – and bring them to their knees.”
According to those who analyzed the bill, it indicated which organizations were completely closed.
The first step tech policy experts noticed was identifying those who were excluded. In 2023, President Joe Biden's sweeping AI executive order gave a wide range of agencies authority to craft AI policy, and most—if not all—of them were suddenly absent. For example, the National Institute of Standards and Technology (NIST) has been tasked with researching AI risk management, assessment, and standards development. (These concerns, by the way, were recently codified into California's AI Safety Act, a law that the AI industry vehemently opposes.) Also missing is any mention of the Office of Science and Technology Policy (OSTP), which centralizes the administration's tech policy in one place before it is reported to the president; the Cybersecurity and Infrastructure Security Agency (CISA), a DHS agency that specializes in Internet threats to national security; or the Center for AI Standards and Innovation (CAISI), whose name speaks for itself.
“Perhaps in practice David Sachs will advise them and [Office of Legislative Affairs] “But it’s surprising that they weren’t listed,” said Ricky Parikh, policy director for the bipartisan Alliance for Secure Artificial Intelligence and a former Biden administration lawyer.
Instead, the proposed moratorium would have been enforced by four agencies: the Justice Department, which would have sued states that violated the order; the Commerce Department, which will analyze which states could lose broadband funding; a Federal Trade Commission that would investigate which states would engage in “deceptive conduct” due to ideological bias; and the Federal Communications Commission, which would develop a federal AI reporting standard.
Sachs, of course, advised everyone – and now they all had the right to seek ways to punish states that wrote or enforced laws on AI.
Populist Republicans, especially those on the MAGA base, immediately saw how much influence Sachs had on the entire order and how that order would threaten any nation. Even though Republicans briefly aligned themselves with the tech right to get Trump elected, Republicans have increasingly attacked their allies for complete ideological inconsistency: they believe AI poses a threat to conservative family values and will steal American jobs, are allergic to federal interference in state sovereignty, and have a general disdain for how quickly tech CEOs have switched from supporting Democrats to Trump. Several red states have begun writing their own AI rulesand governors such as Ron DeSantis of Florida and Sarah Huckabee Sanders of Arkansas have publicly expressed their opposition to the moratorium. Even Trump's open support for the moratorium did not influence the electorate.
“Purely in terms of political strategy, the core of the Republican Party is not David Sachs and [fellow VC and Trump supporter] Marc Andreessen on this. That's simply not true, said Brendan Steinhauser, a longtime Republican strategist and CEO of the bipartisan Alliance for Safe AI. “And I don’t think they care because they’re like: It doesn't matter to us. We're here to get what we want, and this administration has three years left.. We were Harris, Biden and Hillary supporters and then became Trump supporters because it was convenient.»
Little did the AI world expect that MAGA would immediately try to kneecap them, even joining forces with progressive anti-tech groups in government, and that their aggressive approach in Silicon Valley via executive order would further widen the rift. But this was enough for them to retreat temporarily. The following week, a new rumor spread in Washington that the administration would sign an executive order related to artificial intelligence, and they did – if not a completely different, non-preventative, very consistent project directing National Laboratories to become more involved in AI development.
The Special Advisor on Artificial Intelligence and Cryptography was mentioned only once.
Update November 25: Added comment from the White House press service.
