The lazy consensus in Washington right now is that Donald Trump is missing in action on artificial intelligence, leaving an ideological vacuum that strange bedfellows like Steve Bannon and progressive Democrats are eager to fill.
The narrative writes itself. Bannon rails against Silicon Valley technocrats getting too cozy with executive power. Left-wing commentators nod along, warning about unregulated tech monopolies running roughshod over democracy. Both sides claim the former president is asleep at the switch while machine learning algorithms quietly rewrite the rules of modern society.
They are missing the entire point.
Trump’s perceived inaction is not an oversight. It is a calculated, structural disruption of the administrative state's favorite pastime: regulating industries before they even draw breath.
I have watched policy shops in Washington blow millions of dollars trying to draft compliance frameworks for technologies that change faster than the ink can dry on a federal register. I spent years advising venture funds on regulatory risk, and I can tell you flatly that the panic over political silence on artificial intelligence comes from people who mistake stagnation for strategy.
Let us dismantle the core misconceptions driving this manufactured panic.
The Myth Of The Regulatory Vacuum
Critics love to point out that while other global jurisdictions hammer out sweeping legislative codes, Washington remains relatively quiet. They frame this as a vulnerability.
This is backward.
The European Union passed its flagship compliance framework and effectively tied its own industrial hands behind its back before domestic model training could even scale. Bureaucrats love rules because rules justify their budgets. When you demand heavy oversight on neural networks, you aren't protecting the public. You are building a moat for legacy enterprises that can afford a compliance department of five hundred lawyers, while crushing the garage-bound competitor who actually wants to build something disruptive.
Trump understands market dynamics better than the policy wonks writing opinion pieces in legacy broadsheets. When a sector moves at light speed, the worst thing a government can do is cement a static set of guardrails based on yesterday's capabilities.
What Bannon and the populist wing call being too cozy with tech moguls is actually the traditional American playbook of commercial dominance: let the market run hot, let capital deploy, and let innovation outpace the regulators trying to cage it.
The Populist Blind Spot On Compute And National Security
Let us address the elephant in the room. Bannon's primary grievance is that the tech elite are carving out a private empire detached from national sovereignty.
There is a kernel of truth here. Silicon Valley has long suffered from a delusional libertarian streak that imagines code existing above borders. But the populist critique falls apart when you look at the physical reality of modern computation.
Artificial intelligence is not floating in a cloud. It requires massive, hyper-expensive physical infrastructure: silicon fabrication plants, terrawatt-scale energy grids, and rare earth supply chains. You cannot offshore a cluster of five hundred thousand specialized processors without the deep cooperation of the nation-state.
When major labs cut deals for massive energy infrastructure, they aren't escaping state control. They are tethering themselves directly to national power grids. The state doesn't need a heavy-handed regulatory agency dictating model weights when it controls the electrons powering the servers.
Ignoring this physical bottleneck leads pundits to chase shadows. They worry about the ideology embedded in chat outputs while missing the literal energy wars being fought over data center placement in rural America.
The Bipartisan Convergence Of Economic Anxiety
Why are MAGA populists and progressive Democrats suddenly agreeing on this issue? Because both groups are terrified of labor displacement, and both groups fundamentally misunderstand how technological shifts absorb workers.
The progressive view is that algorithms will steal middle-class jobs, so the state must step in with universal basic income, retraining programs, and strict ethical committees.
The populist view is that globalist technocrats are building a surveillance state that will render traditional blue-collar and white-collar workers obsolete, so the state must restrict the technology to protect traditional hierarchies.
Both arguments rely on the lump-of-labor fallacy. They assume there is a finite amount of economic output to go around.
History tells a different story. Every major productivity leap—from containerized shipping to cloud computing—destroyed specific workflows while expanding total economic capacity exponentially. The companies I have seen succeed over the past decade are not the ones that hid from automation. They are the ones that ruthlessly automated routine tasks to free up human capital for complex problem-solving.
When politicians try to freeze a transitional moment with emergency regulations, they do not save jobs. They preserve inefficiencies.
What The Pundits Get Wrong About Power Dynamics
Imagine a scenario where the federal government takes the advice of the panic-mongers and institutes a centralized licensing regime for advanced compute clusters. Who do you think gets the licenses?
It will not be the scrappy startup in Austin or Miami. It will be the incumbents who already have a direct lobbying line to Capitol Hill.
By demanding immediate government intervention, critics are accidentally advocating for the ultimate corporate consolidation. They are asking the state to pick winners by establishing barriers to entry so high that only trillion-dollar balance sheets can clear them.
Trump’s instinct to stay hands-off, whether intentional or the byproduct of shifting priorities, preserves a chaotic, competitive arena where small players still have a puncher's chance.
The real danger to American competitiveness is not a lack of federal oversight. It is the temptation to wrap a dynamic, fluid technological revolution in the suffocating red tape of nineteenth-century bureaucracy.
Stop asking Washington to save you from the future. The friction is where the growth happens.
