Analysis
Silicon Valley's Trump bet pays off with sweeping AI deregulation
New executive order signals a bold pivot from Biden-era policies, fueling innovation and controversy.
When several Silicon Valley executives declared their support for Donald Trump in the months leading up to the election, they explained their stance by citing his expected support for artificial intelligence (AI) development. They anticipated that he would prioritize innovation and progress over excessive caution by removing regulatory barriers put in place by President Joe Biden.
Trump wasted no time fulfilling these expectations. Last weekend, he signed an executive order titled “Removing Barriers to American Leadership in Artificial Intelligence,” signaling the creation of a regulatory environment that gives companies near-unrestricted freedom to develop advanced AI models.
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From right: Elon Musk, Sundar Pichai, Jeff Bezos (with his fiancee), Mark Zuckerberg
(Photo: AP Photo/Julia Demaree Nikhinson, Pool)
This policy shift not only departs from Biden’s approach but also contrasts sharply with the European Union’s comprehensive AI regulation, setting the stage for conflict between the U.S. and Europe. "Trump’s order completely reverses the priorities of the United States in the field of artificial intelligence," said Dr. Tehilla Shwartz Altshuler of the Israel Democracy Institute. "The clash over AI regulation between Europe (and Britain) and the United States will be direct and painful."
Before Trump took office, AI policy was defined by Biden’s October 2023 executive order. On paper, it aimed to promote innovation and preserve the United States’ leadership in AI. In practice, however, it emphasized safeguarding privacy and the rights of citizens, workers, and consumers. The Biden order required federal agencies to ensure AI tools did not harm the public and mandated the development of systems to identify AI-generated content (such as deepfakes) and address challenges in intellectual property protection posed by generative AI (GenAI).
By comparison, the EU’s AI Act, which came into effect in July 2024, imposes far stricter regulations. It bans systems designed to manipulate human behavior, heavily restricts AI use in sensitive sectors like healthcare, education, and law enforcement, and mandates robust oversight of AI systems.
Trump’s new order represents a dramatic reversal, eschewing both Biden’s limited safeguards and the EU’s stringent restrictions. "Instead of addressing concerns like AI’s potential harms, fairness, or content labeling, Trump’s approach emphasizes deregulation," explained Shwartz Altshuler.
The order directs the rescission of AI policies considered barriers to innovation, instructing Trump’s technology, AI, and national security advisers to review and dismantle regulations implemented under Biden’s administration. Within 180 days, a comprehensive action plan will be developed to strengthen American dominance in AI, with input from figures like Assistant to the President for Science and Technology Elon Musk and other senior advisors. The order also highlights the need for AI systems to remain "free from ideological bias or engineered social agendas."
"Trump doesn’t bring practical, forward-looking ideas; instead, his policies appear driven by a desire to undo the previous administration’s work," noted Shwartz Altshuler. "That said, his emphasis on creating a coordinated national AI strategy involving senior officials is valid. Unfortunately, such a strategy remains absent in Israel."
The first beneficiaries of Trump’s order are likely to be tech giants, with companies like Meta already signaling a willingness to roll back long-standing content moderation policies to align with the new administration. Shwartz Altshuler predicts similar trends for GenAI models, where risk management and labeling mechanisms may also be loosened. "If major players like Meta and Google lower their controls, it could result in significant harm," she warned.
The policy is also expected to exacerbate tensions between the U.S. and the EU. "European legislation mandates the protection of human rights throughout the entire AI development and deployment chain," Shwartz Altshuler explained. "With Trump’s staunchly anti-regulatory stance, American tech companies are likely to resist European requirements, delaying product launches in the EU or threatening to withdraw altogether."
Already, U.S. tech firms have postponed AI product rollouts in Europe, citing uncertainties around the new legislation. Trump, who views EU regulations as an attempt to undermine American companies, has signaled his readiness for confrontation. His new AI policy provides American firms with stronger legitimacy to challenge European institutions, secure in the knowledge that they have White House backing.
