Trump’s AI Action Plan: A Distraction from Policies Undermining U.S. Leadership
July 24, 2025 — In a high-profile move on Wednesday, President Trump unveiled a suite of executive orders, delivered a major speech, and released an AI Action Plan aimed at maintaining American leadership in artificial intelligence. However, experts argue that while these announcements created significant media buzz, the administration is simultaneously dismantling foundational policies that originally established the U.S. as a global leader in AI technology.
The AI Action Plan: Ambitious but Surface-Level
The newly released AI Action Plan outlines numerous recommended actions structured around three main pillars: accelerating innovation, building infrastructure, and leading international diplomacy and security within the AI realm. Although the plan includes some thoughtful suggestions, many are incremental or appear motivated by ideological bias, particularly favoring large technology companies.
To complement the plan, the administration issued three executive orders that put into effect a limited subset of proposed actions:
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Combating “Woke AI”: The federal government will henceforth procure only large language AI models deemed “truth-seeking” and “ideologically neutral,” rejecting those perceived as aligned with diversity, equity, and inclusion (DEI) principles. This move is promoted as a step to expedite innovation.
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Accelerating AI Data Centers: The administration reinvigorated efforts to build AI data centers with a more industry-friendly approach than the previous Biden administration. This included waiving certain environmental protections, granting government funds to some of the world’s largest corporations, and offering federal land for private AI infrastructure development.
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Promoting AI Exports: A focused effort to finance and export U.S. AI technologies aims to strengthen American diplomatic influence and reduce reliance on AI products from geopolitical rivals.
While these moves excited the tech industry, which stands to benefit financially, they overshadow a critical issue: the administration’s concurrent erosion of the policies that historically generated U.S. AI dominance.
Dismantling the Foundations of AI Leadership
Maintaining the U.S.’s premier position in AI requires appreciating the historical factors that laid the groundwork for its success. Four long-standing public policy areas have been pivotal to America’s leadership but are now being undermined.
1. Federal Investment in Research & Development
Government funding has been vital to AI’s evolution, supporting foundational research dating back to the 1950s by agencies such as the Department of Defense, NASA, the National Science Foundation, and the National Institutes of Health. Milestones like the first AI programs, early chatbots, expert systems, and breakthroughs in neural networks and natural-language processing were heavily federally supported.
Additionally, public funding undergirded technological advances critical to AI, including hardware, communication networks, lithium-ion batteries, and the internet itself. Despite this, the current administration proposes drastic cuts—slashing nondefense R&D budgets by 36% and firing federal scientists. Though the recent AI plan calls for increased R&D investments, corresponding budget proposals reflect the opposite, threatening long-term scientific inquiry necessary for future AI breakthroughs.
2. Supporting Immigration and Immigrants
The U.S. AI sector’s innovation depends heavily on immigrant talent. The transformer model—the backbone of generative AI—is the brainchild of a Google team largely composed of immigrants or children of immigrants. A 2025 analysis showed that 60% of leading U.S.-based AI startups have immigrant cofounders. Immigrants lead or cofound major AI companies like OpenAI, Anthropic, Google, Microsoft, Nvidia, Intel, and AMD.
However, restrictive immigration policies and actions against AI researchers have begun contributing to a “brain drain,” threatening to diminish America’s talent edge. This trend endangers the rich international talent pool that has historically propelled U.S. AI innovation.
3. Banning Noncompete Agreements
Innovation flourishes when talented individuals freely move between companies and start new ventures—a dynamic particularly evident in Silicon Valley’s history. The prohibition of noncompete agreements in California has been a cornerstone protecting this labor fluidity, enabling employees to spin off successful startups.
Although the Biden-era Federal Trade Commission aimed to ban noncompetes nationwide, that effort has stalled amid regulatory and judicial pushback. The Trump administration’s current stance suggests limited support for such measures, endangering this vital mechanism for sustaining AI innovation across the country.
4. Antitrust Enforcement
Strong antitrust actions have historically broken up monopolies and opened markets, seeding innovation. From dismantling AT&T’s dominance in the 1950s to challenging IBM and Microsoft in later decades, U.S. antitrust policy created a competitive environment that allowed semiconductor, software, and internet sectors to flourish.
The administration’s recent orders to review and potentially ease Federal Trade Commission antitrust investigations risk halting progress in ensuring a competitive AI market. Reduced antitrust enforcement could entrench large incumbents and stifle the kind of dynamic innovation that characterized earlier tech revolutions.
Conclusion: Beyond the Headlines
President Trump’s AI Action Plan and executive orders generated substantial press attention and enthusiasm from tech giants. Yet, these measures largely serve as a distraction from policy shifts that threaten to undermine the very fabric of U.S. AI leadership.
American dominance in AI has been built on decades of consistent federal investment, welcoming immigrant talent, protecting labor mobility, and enforcing competitive markets. Without recommitting to these pillars, the nation risks ceding its leadership in artificial intelligence to global competitors.
As the AI race intensifies worldwide, safeguarding and reinforcing foundational policies—not solely issuing surface-level executive actions—will determine America’s technological future.
Author: Asad Ramzanali, MIT Technology Review
Photography: Stephanie Arnett/MIT Technology Review | Getty, Adobe Stock
