Zinger Key Points
- Trump revokes the AI order as part of a broader action that reverses 78 Biden-era executive actions.
- Some experts view the repeal as a positive step toward economic progress and innovation in the industry.
- Get Wall Street's Hottest Chart Every Morning
President Donald Trump on Monday revoked former President Joe Biden’s comprehensive executive order on artificial intelligence as part of his first actions in office.
The Details: Biden's AI executive order mandated that developers of AI systems posing threats to national security or public safety report the results of safety tests to the U.S. government and tasked the National Institute of Standards and Technology to develop standards for safety testing.
Trump revoked the AI order as part of a broader action that reversed 78 Biden-era executive actions. The move was widely anticipated after the president announced his intention to de-regulate industry on the campaign trail.
Several prominent tech executives, including Elon Musk and Jeff Bezos, contributed to Trump's campaign and attended Monday's inauguration leading some to speculate on their potential influence on the president.
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Why It Matters: Reaction to Trump's reversal of Biden's AI policies has been mixed. Some experts have expressed concern that it could leave Americans exposed to potential risks from AI as giant tech companies would operate without regulatory oversight. Others view the repeal as a positive step toward economic progress and innovation in the industry.
The repeal of Biden's AI framework may have set up a showdown with the European Union's AI act passed in 2023 which mandates transparency and bans certain uses of artificial intelligence.
AI chipmakers Nvidia Corp. NVDA and Advanced Micro Devices, Inc. AMD could see a boost as the loosened restrictions could encourage AI hyper-scalers to increase investments in the technology.
These hyper-scalers, such as Meta Platforms, Inc. META and Alphabet, Inc. GOOG GOOGL, could potentially accelerate the development and deployment of AI technologies across their platforms and services as the government takes a more "hands-off" approach to regulation.
Both Mark Zuckerberg, CEO of Meta Platforms, and Sundar Pichai, CEO of Alphabet, were present at Trump’s inauguration, suggesting potential alignment with the new administration’s approach to AI regulation.
Though the long-term effects of Trump's policies remain to be seen, the market is reacting positively one day after his inauguration. All three major indices are up Tuesday with the SPDR S&P 500 ETF Trust SPY, tracking the S&P 500, up 0.51% at $600.65 and the Invesco QQQ Trust QQQ, tracking the Nasdaq 100 index, up 0.14% at $522.49 at the time of publication Tuesday.
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