Trump Admin Working With Venture Capital, Big Tech to Inform AI Policy

By Aman Kidwai featuring comments by Bhaskar Chakravorti, Dean of Global Business at the Fletcher School

It’s still early in the second Donald Trump administration, but his direction on tech and AI policy contains some clear elements. He’s appointed a few key advisers who will oversee policy developments in emerging areas including AI, crypto, data privacy and online freedom of speech, and he’s announced a new innovation initiative.

While the exact contours of the new administration’s plans are far from concrete, researchers and technology industry analysts predict less federal regulation in the future.

“It is clear that deregulation, continued deregulation, or absence of regulations” is the goal of the future, Tony Filippone, chief research officer at HFS Research, told Newsweek, noting that for the major tech companies now influencing the future of AI policy, the European Union’s AI Act, which sets standards, guidelines and risk assessments for emerging automation technology, is a “significant encumbrance on these companies.”

One of the Trump administration’s first actions was to rescind the Biden-era executive order that addressed safety in the adoption of artificial intelligence. The order required developers of AI technology to share safety and impact test results with the government. It attempted to develop standards for AI security and touched on matters of “privacy, civil rights, consumer protections, scientific research and worker rights,” according to The Associated Press.

Trump also announced Project Stargate, a program with an initial $100 billion AI acceleration investment in partnership with the some of the world’s largest tech companies, including OpenAI, Oracle and SoftBank.

“Stargate will be building the physical and virtual infrastructure to power the next generation of advancements in AI,” Trump said at the January 21 announcement.

These investment plans, alongside the massive U.S. private sector investments in AI technology, hit a stumbling block with the arrival of DeepSeek, a Chinese-built AI software with capabilities similar to the U.S. offerings that was reportedly made at a fraction of the cost.

“What that has done is potentially open the door to China taking a lead in terms of AI development,” Bhaskar Chakravorti, dean of global business and executive director of the Institute for Business in the Global Context at Tufts University’s Fletcher School of Law and Diplomacy, told Newsweek. “This is creating an enormous amount of angst within the tech sector, and obviously within the investment sector.”

For a long time, U.S. technology developers enjoyed a major capital advantage over global competition. They have always had more money to invest into the newest emerging technologies. U.S. venture capital invested $200 billion in businesses in 2024, and U.K. venture firms invested around $16 billion, according to Statista, while in 2021 Crunchbase reported investment in U.S. companies to be the highest at $269 billion, followed by China ($60 billion), the U.K. ($32 billion) and India ($28 billion). Most technology industry observers believe that AI represents a gold rush-style opportunity.

“The first Big Tech company that creates AGI [artificial general intelligence, a level akin to human cognitive abilities, which can independently complete work] will be the first trillionaires,” Christopher DiCarlo, philosophy professor at the University of Toronto and author of the recently published book Building a God: The Ethics of Artificial Intelligence and the Race to Control It, told Newsweek.

DiCarlo added that the current scenario also represents a potential bubble, not unlike the dot-com boom and bust at the turn of this century: “[The internet] was a big deal but nobody really knew what it all meant.” The same might be true for AI, he said.

DeepSeek’s presence has dropped stock prices and forecasts across the U.S. tech sector.

“There is a lot of confusion in the industry,” Chakravorti said. “People don’t quite understand what the value of this enormous amount of investment is, if the incremental benefit is not that much.”

With all of this going on, the prospects of CEOs, CHROs and other business leaders looking to understand how to harness this technology for their own benefits have grown increasingly complicated with each passing day. Chakravorti points out that Wall Street and other outside pressures make business leaders feel like they’re behind on AI adoption. Meanwhile, remote work, technology advancements and ongoing regulation and fears around AI adoption persist.

Experts speaking with Newsweek advised smaller companies to work with existing technology partners to learn how they are implementing AI into existing solutions and to encourage experimentation among employees while maintaining their own standards for safety, data privacy and other forms of risk management.

The Future of Regulation

In the absence of regulatory oversight over the next four or more years, the onus for responsibly deploying artificial intelligence in the workplace will largely hinge on the companies offering it, and their customers’ behaviors. State and municipal policies can also play a role, as they could prevent a tech giant like Microsoft, Google or Amazon from freely deploying AI tools with customers in that jurisdiction if certain laws like the ones in the EU are enacted.

As it stands right now, a smattering of local AI regulations are in place, mostly for data privacy and identity theft protection, Filippone said.

“[Local laws] impede the ability for the Big Tech companies to grow effectively out there. While they did defeat something in California, there is still considerable concern out there that some of the states may pass certain rules that create regulation in lieu of national regulation,” he explained.

Going forward, it looks like protections around the immediate future of AI will be on local regulators and the companies that employ AI technology.

“These privacy-related issues are not new,” Filippone said, before listing some examples. “Facebook and Cambridge Analytica, TikTok…our data, consumer data [or] employee data is being used in ways that we wish it hadn’t been used, or we have concerns over it. This issue remains, and companies need to remain vigilant about their data privacy.”

Trump Admin Cozy With Silicon Valley and Sand Hill Road

DeepSeek was an early win for the Chinese tech industry in a long race to reach the next frontier of AI, DiCarlo and Filippone said.

“If you curtail a country’s ability to do certain things by regulating Nvidia chips and that sort of thing, they’re going to figure out novel, creative ways around it, which is exactly what they did,” DiCarlo said. “That whole DeepSeek thing wasn’t a shock at all. It was actually to be expected.”

Despite the apparent setback, Stargate will continue chasing the wealth creation that will come from a U.S. tech titan winning the AI arms race, and avoiding the reputation loss that would come from losing to a foreign competitor.

“There has always been this race, and Trump had come into his presidency with the idea that the United States is going to win this race no matter what,” Chakravorti said. “They’re going to put hundreds of billions of dollars into the United States winning the race.”

Chakravorti noted that the tech titans have differing goals, outside of deregulation. Google’s famed search product was threatened by the emergence of ChatGPT. Microsoft has tried to break into the search industry for a long time. Google, Microsoft and Amazon have various AI applications in their business and cloud services suites. Vice President JD Vance is a former venture capital principal with close ties to billionaire tech investor Peter Thiel.

“Everybody has a somewhat different reason for wanting to be at the party,” Chakravorti explained.

Figuring It Out

The risks of the proliferation of machine learning and automation technology are fairly well documented. In the world of hiring, management and leadership, we have also seen applications of AI used with some success and some negative outcomes as well. Résumé screening software, for example, can save recruiters a lot of time when thousands of people apply for a position, but it may also root out candidates who would be good, and may do so unethically or inequitably.

Chakravorti noted that many executives feel pressure to adopt or implement AI, including questions from financial analysts.

“That pressure is also causing essentially another risk, which is a managerial decision risk, because people feel that they have to do something, even though their best instincts tell them that we are still not there yet,” he said.

At the moment, the outputs from AI software like ChatGPT are not reliable enough to make final drafts or autonomously eliminate a job.

“You might get a summary, but you’re not quite sure if the summary is accurate, if it’s complete, comprehensive, introduces errors and so on. So there’s a trust factor, and part of the risk is that if you rely on just what the AI gives you, you might actually be making a mistake, or you may be incomplete, or you may be entering false evidence,” Chakravorti said.

The other risks many fear are mass job displacement. But that is not likely to be occurring soon.

“You’re not going to lose your job to AI right now,” Filippone said. “You’re going to lose your job to a human being using AI, and that’s how we view it currently, based upon the state of the technology that’s currently coming out right now.”

Going forward, business leaders don’t need to invent a new, AI-aided way of working for everyone on their different teams. They can work with existing technology vendors to see how they are folding the newest technology into their offerings.

“The best places for them to get the best information are going to be a combination of discussing these particular solutions with the analysts and the service providers and the technology providers, engaging in strategic conversations with these organizations around where they see development in their industries and their business processes,” Filippone said.

And when it comes to adoption, the best thing to do is acknowledge that we have seen AI applications in many forms through the years, whether it’s autocorrect on Microsoft Word, suggested formulas or organization on spreadsheets, or meeting transcripts and auto-written responses to emails. People are already using these tools—they don’t need to know the technology behind them to benefit, as long as somebody in the organization does.

“The good news is that the use of the technology is so widely used in consumer products. It’s built on your phone nowadays, every student is using it right now. From a workforce perspective, you’re seeing it used in interviews, in résumé generation,” Filippone said. “People are skilling up, maybe not in the workplace necessarily…but I assure you it is being used by your employees.”

(This post is republished from Newsweek.)