Trump 2.0 and AI | ‘Just Build’

The global artificial intelligence landscape is experiencing a seismic shift as the United States, led by President Trump's actions just days into his second term in the White House, dramatically revamps its approach to AI development and regulation. This transformation presents unprecedented opportunities and strategic challenges for business leaders navigating the competitive landscape.

The most significant change comes from the immediate dismantling of previous regulatory frameworks shaped by the Joe Biden administration. This creates a markedly different operating environment for AI companies and enterprises investing in AI capabilities. Trump's deregulation prioritizes a "just build" ethos over the careful balance of innovation and safety protocols that characterized previous US federal policies.

The massive joint venture between SoftBank, OpenAI, and Oracle, Stargate, was announced on January 21. It exemplifies the scale of opportunity in this new AI landscape. With an initial investment of $100 billion and plans to scale to $500 billion, this partnership is already breaking ground on new data centers, including strategic locations like Abilene, Texas. For CEOs, this represents not just a benchmark for the scale of potential investment but also a signal of the infrastructure requirements needed to compete in the next phase of AI development.

Many in Washington, DC, see the competitive dynamics with China as the crucial factor driving this "just build" policy shift. Industry leaders from Alphabet and OpenAI have highlighted the intensifying global race for AI supremacy, with China making substantial investments in AI technology. Trump 2.0's new regulatory approach encourages US companies to accelerate their AI development, though questions remain about long-term risk management and market stability.

Perhaps most notably, we're seeing the emergence of three distinct regulatory approaches globally. While the US moves toward rapid deregulation and a market-driven approach, the European Union maintains a precautionary stance with stringent oversight on privacy and safety. At the same time, China is taking a state-directed approach to AI regulation, balancing technological advancement with national security and social stability in the Middle Kingdom.

The Trump administration has assembled an influential advisory group, including prominent tech figures like Elon Musk and David Sacks, which indicates a strong alignment between government policy and private sector interests. However, this presents interesting tensions, particularly given Musk's documented concerns about AI safety alongside his investments in the sector through xAI. Already Musk, an OpenAI competitor and senior Trump advisor, tweeted that Stargate joint venture participants "don't actually have the money," suggesting that the project is all hat and no cattle.

For CEOs, the reduced regulatory friction in the United States creates opportunities for accelerated AI deployment and development. Still, leaders must balance speed-to-market against potential future regulatory backlash, mainly if operating in the European Union or China. Multinational companies should evaluate their AI development roadmaps, assess infrastructure investment opportunities, and maintain flexible compliance frameworks that can adapt to different regional requirements.

The success of a company's AI strategy will likely depend on its ability to self-regulate effectively while pursuing aggressive growth.

Frank Pasquale, a law professor at Cornell Tech and Cornell Law School, noted that while this new Trump 2.0 approach to AI may yield short-term gains, the absence of guardrails could present long-term challenges. The key for business leaders will be finding the right balance between capitalizing on immediate opportunities while building sustainable, responsible AI practices that weather potential future regulatory changes.

Enjoy the ride + plan accordingly.

-Marc

Marc A. Ross | Chief Communications Strategist @ Caracal

Sneaker colors

"Between 70 percent to 90 percent of subconscious judgment on a product is made in a few seconds on color alone. It can excite or calm us; it can raise our blood pressure. It's really powerful." -- Jenny Ross, the head of concept design and strategy for lifestyle footwear at New Balance

Mark C. O'Flaherty, in a New York Times article entitled "The Secret Psychology of Sneaker Colors," explains how Nike, Adidas, and New Balance are not randomly choosing glaring shades for thier sneakers.

'Aqua blue, acid lime, and grape purple. Electric orange interspersed with neon pink. Gray suede and cheetah print mixed with white and gold. These are not descriptions of a minimalist's worst nightmare, but rather new color combinations… are jarring by design.

"In the age of the infinite scroll and the era of sneaker culture, where the competition to make the hottest, rarest, most wanted kick is more intense than ever, the shoe that clashes shades with the most force stops traffic — at least of the online kind. As a result, athletic shoe companies are increasingly becoming fluent aficionados of that old art: color theory."

A favorite color of one of my girlfriends from back in the day was cobalt blue. Not blue, but cobalt blue.

My favorite NFL team, the Detroit Lions, wears "Honolulu blue" jerseys, and my grad business school, the University of North Carolina, wears "Carolina blue."

A simple blue does not work.

The United States AI regulatory environment for 2025

Based on three policy presentations I attended this week from the Center for Security and Emerging Technology (CSET), Cooley, and the Federalist Society, I expect significant shifts in the United States AI regulatory environment by 2025.

Key themes will emerge around national competitiveness, reduced regulatory burden, and strategic technology competition with China.

Here are the highlights:

Inside the Beltway…

Innovation-first policy approach: With Trump 2.0, a fundamental shift in AI policy direction is emerging, with innovation as the central "north star" principle. This pivot represents a deliberate departure from the Biden administration's earlier cautious stance and the EU's comprehensive regulatory framework.

The preference for using "advanced computation" terminology over "AI" suggests a deliberate reframing of the technological landscape, potentially to avoid the regulatory and political baggage associated with the broader AI term. This semantic shift could signal a more technically oriented and innovation-friendly policy framework.

China competition and global positioning: Trump 2.0 and new Congressional leaders are intensely focused on technological competition with China while actively resisting European-style regulatory frameworks. This dual approach suggests a deliberate positioning of US policy to maintain competitive advantages in the global AI race. 

Legislative and executive implementation: Unified GOP government control could accelerate policy implementation, though the Senate's 60-vote filibuster threshold ensures that major legislation will still require bipartisan compromise. The expected repeal of Biden's AI Executive Order will signal a dramatic shift in federal AI governance. The first 100-200 days appear critical, particularly regarding budget reconciliation processes that could reshape R&D funding and tax policy.

Tech industry regulation and reform: Under the leadership of new FCC Chairman Brendan Carr, a significant shift in tech industry oversight will emerge, centered on Section 230 reform. While scrutiny of major tech companies continues, the focus is pivoting from market power concerns to content moderation and perceived censorship issues. This evolution suggests a potentially differentiated regulatory approach between large "Big Tech" firms and “Little Tech” -  smaller technology companies, leading to more nuanced oversight frameworks.

Corporate landscape and competition policy: The technology sector appears poised for increased merger and acquisition activity, even as antitrust scrutiny of major tech companies continues. This seemingly paradoxical approach suggests a nuanced policy environment that may encourage market consolidation among smaller players while maintaining vigilance over Big Tech's market influence. The "techlash" against Big Tech continues with potentially different enforcement priorities around content moderation and perceived censorship issues.

Digital safety and intellectual property protection: In 2025, expect a significant focus on protecting individuals and creative industries. This includes efforts to combat deepfakes, enhance child safety in digital spaces, and strengthen intellectual property protections for creative industries affected by AI technologies. These initiatives reflect an understanding that AI advancement must be balanced with protecting societal interests and existing creative rights, even as technology evolves rapidly.

Federalism and regulatory complexity: State-level AI regulation continues to evolve independently of federal policy, creating a complex business compliance landscape. This growing patchwork of state regulations presents practical challenges for companies operating across multiple jurisdictions while potentially providing advocates of safe AI a venue to slow the acceleration of advanced and frontier AI models.

In the world…

International standards and guardrails: Despite America’s emphasis on domestic innovation and competition with China, the need for international cooperation through multilateral AI summits is acknowledged. This suggests a nuanced approach that balances aggressive technological advancement with recognizing that specific global standards and guardrails are necessary for stable technological development and deployment. The continued use of multilateral AI summits indicates a recognition that while competition with China is paramount, international cooperation and standard-setting remain necessary for establishing workable global guidelines.

National security and military AI integration: The US government has significantly expanded its military AI capabilities through various initiatives, with the Department of Defense's Chief Digital and AI Office leading this transformation. Establishing programs like Unit X demonstrates a concrete commitment to integrating AI technologies into defense operations. This military modernization effort is closely tied to strategic competition with China, which has emerged as a central driver of US policy decisions in the AI space. The emphasis on military applications reflects a broader understanding that AI superiority is crucial for maintaining strategic advantages in modern warfare and defense capabilities.

Talent and immigration policy: Recognizing human capital as a critical component of American AI leadership has sparked renewed focus on immigration reform, particularly regarding technical talent in the United States. Policy discussions will increasingly center on creating pathways to retain American college graduates while attracting highly skilled professionals in the AI and technology sectors. This emphasis on talent acquisition and retention acknowledges that maintaining technological leadership requires investment in research and development and access to global expertise.

In the states…

State-level regulatory momentum: Without comprehensive federal legislation, states will increasingly take the initiative to develop their own AI regulatory frameworks. This growing patchwork of state-level regulations represents a significant shift in how AI governance is evolving in the United States. The trend suggests that states are unwilling to wait for federal action. They are moving forward with their AI oversight and regulation approaches, creating a dynamic and rapidly evolving regulatory landscape. States are creating rules, establishing new oversight bodies, defining penalties for non-compliance, and developing frameworks for monitoring and enforcing AI-related regulations. This includes creating new institutional capabilities and expertise within state governments to oversee AI deployment and use effectively.

State-level consumer protection focus: A central theme emerging across state initiatives is emphasizing consumer protection measures, which have long been the remit of states under America’s federal system. This focus reflects growing public concern about AI's impact on individual privacy, rights, data protection, and interests. States are particularly attentive to establishing guardrails that protect consumers from potential AI-related harms while ensuring transparency in how AI systems interact with and affect their citizens.

State-level anti-discrimination and fairness standards: A significant component of state-level AI legislation will focus on preventing discrimination and ensuring fairness in AI systems. This theme emerges from the broader consumer protection emphasis but deserves specific attention as states seek to develop detailed requirements for AI fairness testing, bias detection, and mitigation strategies. 

Pro-tip: Make sure you have a professional with expertise in geopolitical communications on your team. Such a pro will help you navigate the challenges of geopolitics on your business objectives and help you confidently speak about this environment.

Caracal is here to help.

Enjoy the ride + plan accordingly.

-Marc