Implications for Law Firms in the Wake of Trump Administration Repeal of AI Regulations

Implications for Law Firms in the Wake of Trump Administration Repeal of AI Regulations

According to a Bloomberg Law article by Jackie Davalos and Oma Seddiq, President Donald Trump rescinded a major executive order on artificial intelligence (AI) from the Biden administration, signaling a shift in federal AI oversight. The repeal halts key safety and transparency requirements previously imposed on AI developers and leaves the future of US AI regulations uncertain.

Biden’s 2023 executive order mandated that leading AI companies share safety test results and other critical information with the federal government. It also established the U.S. AI Safety Institute to develop voluntary guidelines and best practices. 

Trump, who previously criticized these regulations as stifling innovation, appointed David Sacks, a vocal critic of tech regulation, to oversee AI policy. The repeal comes as other nations, notably the European Union, with its comprehensive AI Act, implement stringent regulations on high-risk AI applications like facial recognition and healthcare.

Despite repealing Biden’s order, the Trump administration is expected to maintain some focus on promoting US competitiveness in AI, particularly against China. His stance emphasizes national security and economic growth, including boosting domestic energy production and attracting foreign investments for AI-related infrastructure. Historically, Trump’s first term saw executive orders to foster safe government use of AI and increase R&D funding.

Law firms should anticipate more laissez-faire federal AI regulations under Trump, potentially increasing reliance on state-level regulations. Firms should monitor state legislative trends, particularly in tech hubs like California, and advise clients on navigating varying compliance requirements. Additionally, the evolving global AI regulatory landscape may impact cross-border operations, making staying informed on international developments crucial.