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President Trump signed an executive order aimed at limiting state level regulation of AI. The move is supported by tech leaders who have argued local rules could stifle innovation. We're joined by David Sachs, the White House AI and Crypto zah Or, Senior Advisor, and David, I think it is a really good place to start in your work with the President in consulting and advising on the formulation of
this executive order. What was the problem that you were trying to solve for and what is it that you said to the President about why this EO was the right approach to focus on state level laws?
Well, thanks for having me.
The problem that we see is that you've got one thousand different bills going through state legislatures right now to regulate AI, and over one hundred measures already passed. Some of these bills are country victory, and you've got fifty different states running in fifty different directions.
That type of compliance.
Regime is going to be very hard for small companies and startups, especially innovators, to comply with. And so what we need is a single federal or national framework for AI regulation and that's what the President has supported, and by the way, he supported this for a long time. If you go back to his July speech on AI
he called for a single national framework then. And what we've done with the SEO now is to make clear that is the administration's policy and to task members of the administration to work with Congress to try and enact that framework through legislation, because ultimately this needs to be a law, and in the meantime create tools that the administration can use to push back on examples of the most onerous and excessive state regulations.
David, there is of course some pushback you know, on the executive order from the states themselves, from other Republicans, you know, as you know, like I studied the July speech and strategy closely, a big part of it, you know, was infrastructure related and about deregulation. The concern about this latest executive order is that while it addresses your concerns about many different pieces of state regulation, it does not provide for a single federal framework.
Well, at the end of the day, that single federal framework has be enacted through law, and we need Congress to do that. And so the President has asked Congress to do that, and these task members of the administration to work with Congress to produce that framework. In the meantime, what we've done here is articulated set of principles. We said what values are important to us. We said that
we want to protect child safety, that's important. We want to respect copyright, we want to preserve the ability of local communities to choose what infrastructures and their communities. We're not seeking to preempt the states in any of those areas. So this is an important set of principles that we have put forth. And at the same time, the EO provides for a number of tools that can be used to push back on excessive state regulation. And let me
just illustrate why I think this is so necessary. What we're really talking about here is regulation of AI models and algorithms. Well, think about how an AI model is developed. You can have developers in one state of multiple states writing the code. It can then be trained in a data center in another state. You then can have inference happen in another state, and the entire service is provided
over the Internet using national telecommunications infrastructure. So you're dealing there with at least four different states and all of them can lay claim to regulating those AI models, and those regulations can be in contradiction with each other. Even
Democrat governors have admitted this as a problem. So just the other day, Kathy hoklel the governor of New York It basically said that she might prefer to enact California's SB fifty three, which is a regulation that they just passed in California, rather than the bill that her own assembly gave her, the Raise Act, because she sees that, wait, do we really want to create this patchwork in different regulations.
So even democratic governors are realizing this is a problem, and if they all run in different directions, then we're going to end up with a patchwork or a mismash of regulations that are impossible for companies to comply with. What the President is calling for here is just common sense. We want to get to a single national framework of compliance as opposed to fifty states running in different directions.
Meanwhile, Kathy Hokle actually is getting a bit of criticism, perhaps for narrowing and what some are saying is bowing down to business. David, I'm really interested in how you oppose that view, because there is anxiety in the population, AI versus jobs, AI versus energy bills. How are you giving them the sense that we haven't seen federal government and indeed now state governments just handing over the reins to big tech billionaires as people call them.
Right.
No, I understand there's a lot of fear out there about AI and job los specifically, and a lot of those fears have been drummed up. Let me just say on the job loss question, because I think this is really important that Yale just released a study and it showed that in the thirty three months after the launch of chat GPT, there was no discernible disruption to the US job market none. They said, no discernible disruption. And in fact, if you look right now, more jobs are
being created than being lost. So this whole idea of job losses just isn't true. There was an article on the Wall Street Journal just last week talking about the construction boom that's happening that's benefiting construction workers like electricians, like plumbers, like workers who pour concrete or hang drywall.
Their wages are up thirty percent.
Because this infrastructure boom that's happening right now, and there's actually a job shortage in many of those trades, meaning we need more workers going into those trades. So what we're seeing right now is an overall AI boom that's benefiting the economy. You know, the GDP growth rate was tracking about four percent, and half of that up to half of it's been attributed to AI. So I just think that this narrow about job loss has been blown
out of proportion. Certainly there could be job displacement in the future, but we haven't seen any of that so far.
It's been quite the opposite. It has been job gains.
David final one on the EO, if I may, you know what this EO allows for. Is it the sort of hope that it will lead to the DOJ sewing states like New York and California. And if that's the case, you know the President and the administration's confidence that you'd win them.
Well, that is one of the tools that is in the EO is that the DOJ has been tasked to form a litigation task Force that would have the ability to push back on excessively burn some state laws, laws that may be unconstitutional, violate the First Amendment, things like that. By the way, the DOJ already had that power, so this is not a novel power. But what's being done here in the CEO is we're marshaling all the resources of the federal government behind the strategy of the President
to create a national framework. Now, in terms of what laws would go after, that's a decision that has been made. We haven't decided whether California and New York should be targets in that way. The one that I think is probably the most successive is this Colorado law that seeks to prohibit algorithmic discrimination. What that basically says is that if an AI model has a disparate impact on a
protected group, then that model is violating the law. Model developers, by the way, I have no idea how to comply with this because they're not aware of all the downstream uses of their model. I mean, if a business decides to use an AI model in a hiring decision, for example, that business is already on the hook for discrimination. So how would the model developer know that it was being used in that way? But what Colorado was trying to do there is get their ideology inserted into the model.
That's very concerning to us.
We think there's a first amendment issue there, But look, we haven't made any decisions in terms of how that litigation task for US to be used.
David Briefly, all of this is set in the context of US versus China and a deemed to run forward on AI development. Meanwhile, a busy week and eight two hundreds might indeed be able to get to China. How many do you think you'll do in volumes and what do you think the appetite is of China to buy in videos more sophisticated chips.
Well, it's interesting.
I just saw an article that said that China was rejecting the H two hundred, So apparently they don't want them, and I think the reason for that is they want semiconductor independence. The same way that the United States wanted to be energy independent. They want to be semiconductor independent. So they're rejecting our chips. And that's part of the calculation that goes into the decision of what we authorized
to be sold to China. The US policy has always been that we don't allow the leading edge chips, and we're not.
This is this H two hundred chip.
It was state of the art a couple of years ago, but now it's been superseded by the new or Blackwell architecture and the Ruben architecture that's coming out next year. So this is now a lagging chip, not a leading chip. But what you see is China is not taking them because they want to prop up and subsidize Wilwey.
They want to create a national champion.
And that was part of our calculation of selling not the best but lagging chips tochch is you can take market share away from Walwig. But I think the Chinese government's figured that out and that's why they're not allowing them.
David Sachs, we always wish we had more time White House, AI and cryptos Are We thank you for joining us today on the executive Order