What Trump's AI Action Plan Means For U.S. Tech Leadership

Forbes

4 days ago

Washington, DC - January 23: AI and Crypto Czar David Sacks speaks with President Donald J Trump as ... More he signs executive orders in the Oval Office.
On July 23, the Trump administration released its 'Winning the Race – America's AI Action Plan.' The administration's new AI action plan comes after months of policy shifts, industry dealmaking and public input. Here is a breakdown of what it contains and how we got to this point.
In the plan's preamble, President Trump states: 'Today, a new frontier of scientific discovery lies before us, defined by transformative technologies such as artificial intelligence… Breakthroughs in these fields have the potential to reshape the global balance of power, spark entirely new industries, and revolutionize the way we live and work. As our global competitors race to exploit these technologies, it is a national security imperative for the United States to achieve and maintain unquestioned and unchallenged global technological dominance.' This sets the stage for a plan that acts as a blueprint for an acceleration strategy prioritizing infrastructure investment and innovation over regulation.
The Journey of AI And American Leadership
The administration's focus on AI dates from Trump's first term, when he became the first president to issue an executive order on the topic. Since 2019, maintaining and extending American leadership has been the priority. During the first week of his second presidential term, he issued a new directive to remove barriers to American leadership in AI, setting the tone for deregulation and positioning AI at the center of the U.S. geopolitical, trade and economic strategy.
The plan announcement followed a flurry of activity during the first 180 days of Trump's second term. It started with the revocation, on inauguration day, of Biden's AI executive order viewed as an inhibitor to innovation with regulatory overtones, emphasis on equity, civil rights, enforcement of consumer protection laws and safeguards against bias, discrimination, infringements on privacy and other harms from AI. The January 23 executive order set the stage for 'innovation, driven by the strength of our free markets, world-class research institutions, and entrepreneurial spirit,' and asked for the creation of an action plan to 'sustain and enhance America's global AI dominance.' The National Science Foundation followed with a request for information to support the development of the plan. This resulted in more than 10,000 responses and exposed a divide between the industry and civil society. The industry supported the push for global leadership and resisted regulation. Civil society yearned for accountability and expressed concerns about job loss, copyright infringement, disinformation and privacy.
Two major announcements signaled the private sector's central role in AI infrastructure buildout. In January, OpenAI, SoftBank, Oracle, and MGX launched Stargate, a $500 billion initiative to expand U.S. AI capacity. In July, companies pledged over $90 billion at the Pennsylvania Energy and Innovation Summit to fund data centers and power infrastructure. Both efforts underscore a market-led push to scale AI while advancing U.S. technological dominance.
On the government side, the White House moved to harness federal purchasing power to steer AI development. In April, the Office of Management and Budget directed agencies to appoint chief AI officers, publish AI strategies, and set rules for using powerful systems like generative AI. Their 'AI Use Memo' encouraged agency AI adoption and the removal of risk-averse barriers to innovation. A companion 'AI Procurement Memo' focused on buying American-made AI tools and simplifying procurement. Together, the policies use public-sector demand to influence industry behavior.
Export controls on advanced AI chips also shifted sharply this year. In April, the administration imposed a ban on Nvidia's and AMD's processors, citing national security and limiting China's access. But by July, as part of a rare earths trade deal, restrictions were eased to allow sales with export licenses. Supporters said the move balanced security with economic interests; critics warned it could erode America's competitive edge. This policy reversal marked a notable departure from the Biden-era AI Diffusion framework.
On the legislative front, Congress rejected a House-passed 10-year moratorium on state AI regulations when the Senate voted 99–1 to strip it from H.R. 1, the One Big Beautiful Bill Act. Instead, H.R. 1 was enacted, allocating funds for AI in defense, transformational AI models at the Department of Energy, and tech solutions for rural hospitals. With states able to legislate freely, the move increased pressure on the White House and Congress to work on federal legislation or preemption to avoid a patchwork of state laws.
The AI Action Plan
Unveiled at the 'Winning the AI Race' summit on July 23, the plan crystallizes a vision to ensure U.S. dominance in artificial intelligence. Introduced by President Trump and top officials, the plan rests on three pillars: accelerating innovation, building AI infrastructure, and leading international AI diplomacy and security. The 28-page document identifies over 90 federal policy actions across these three areas.
During an interview with CNBC, Greg Barbaccia, U.S. Federal Chief Information Officer, called the plan a 'whole of government strategy.' It emphasizes removing regulatory barriers, expanding domestic chip manufacturing, and enabling large-scale adoption of AI across government and industry. Key policies in the plan include expedited and modernized permitting for data centers and semiconductor fabs, along with national initiatives to expand the skilled workforce, particularly electricians and HVAC technicians, to meet rising infrastructure demands.
The plan also emphasizes exporting American AI leadership through full-stack partnerships with allied nations, combining chips, software, models and standards. It directs the Commerce and State Departments to coordinate with industry to deliver secure AI packages abroad. The plan outlines an ambitious international strategy to shape global AI norms and secure supply chains. It calls for engaging with like-minded allies while promoting interoperability and adoption of U.S.-led AI standards.
To safeguard national interests, the plan includes policies to restrict outbound investment in adversarial nations, defend against intellectual property theft, and ensure AI infrastructure is free from foreign adversary technology, notably from China. This combination of infrastructure buildout and AI diplomacy aims to position the U.S. as a leader not only through innovation, but through standard setting, global commerce and adoption and diffusion of American technology.
The plan calls for updates to federal procurement rules to ensure that frontier models used by the government are free from top-down ideological bias and aligned with principles of free expression. It offers no details on how this will be implemented. The document does not define how objectivity will be measured, which agencies will oversee compliance, or what enforcement mechanisms will apply, leaving execution to future regulatory or agency-specific action.
A central pillar of the action plan is a sweeping deregulatory agenda aimed at removing federal and state barriers to AI innovation. The plan directs the Office of Science and Technology Policy (OSTP) to launch a public Request for Information to identify federal rules that hinder AI adoption. Simultaneously, the Office of Management and Budget (OMB), under Executive Order 14192 'Unleashing Prosperity Through Deregulation,' is tasked with working across all federal agencies to identify, revise or repeal regulations and guidance that unnecessarily constrain AI development or deployment.
The plan also calls for integrating deregulatory criteria into funding decisions. Agencies are instructed to assess a state's AI regulatory climate and potentially limit discretionary funding to states with regimes that may impair program effectiveness. This can be seen as a direct reaction to the failed attempt at a moratorium for state-level AI legislation.
Additionally, the Federal Communications Commission (FCC) is directed to examine whether state AI laws interfere with its federal mandates, while the Federal Trade Commission (FTC) is instructed to review prior investigations and consent decrees to ensure they do not impose undue burdens on AI innovation.
While framed as a strategy to streamline innovation, the plan's approach draws scrutiny about the politicization of regulatory agencies. The recommendation to use agencies like the FCC and FTC to roll back enforcement or pressure states on funding decisions has raised concerns among critics about potential federal overreach. However, aligning agency policy with national economic goals is both lawful and can be characterized as necessary to maintain U.S. competitiveness in a fast-moving global race.
Importantly, the plan frames AI as both an economic and national security imperative. Frontier models must reflect American values and free speech, and infrastructure must be free of foreign adversary technology. The approach is explicitly deregulatory and pro-industry, with global ambitions.
The action plan's release marks a major milestone in the administration's strategy to align public and private efforts around a unified AI agenda—and signals that Congress will now face pressure to translate these principles into national legislation.
What This Means For The Future Of AI
The plan marks a significant moment in U.S. tech policy. The document outlines a clear national direction that embraces acceleration, private-sector leadership, and deregulation as drivers of AI growth. It offers a coherent industrial policy that links AI development to economic competitiveness, infrastructure expansion, and national security. It will shape federal priorities, influence international AI diplomacy, and accelerate domestic capacity building in the months ahead.
Yet the plan's deregulatory stance also reveals its limits. It largely disregards the concerns raised by civil society during the public consultation process, which emphasized transparency, accountability, and protections against disinformation, bias and surveillance. Instead, the plan places regulatory rollback and centralized control of agency behavior at the core of its strategy, raising questions about whether innovation is being pursued at the expense of democratic safeguards.
The real test now shifts to Congress. With no comprehensive federal law in place, lawmakers will face growing pressure to translate this accelerationist vision into legislation that balances innovation with oversight, fosters growth without fragmentation, and builds public trust in the transformative technologies reshaping American life. Whether Congress can keep pace with this vision remains to be seen.