Could Federal AI Intervention Impact Innovation?

0:00The White House is creating a new executive order in hopes to stop states from creating their own AI laws. Today on the show, we're going to be talking about the new drafted executive order, which is soon to be signed by President Donald Trump, that is going to challenge states' efforts to make their own AI laws. It's going to establish an AI task force to launch lawsuits and stop federal funding for states that have contested AI laws. And this is something that is being supported in one way or another by Sam Altman's OpenAI and also the venture capital firm Andresen Horwitz, who essentially oppose a state-by-state policy approach.

0:35So this is a very interesting moment to see if the federal government, if the heads of industry will stop this or if there's going to be kind of a battle throughout the state. So we're going to be diving into all of this on the show today. But before we do, I wanted to mention that if you want to try all of the AI models I talk about on the show, I'd love for you to check out my own startup, which is called AIbox.ai. I'll leave a link in the description. You get access to all of the top AI models from Google, OpenAI, Anthropic. You get everything for image generation, tons of different AI image models, tons of different audio models, 11 labs and OpenAI's audio stuff.

1:12So it's all 20 bucks a month, all in one platform. You can compare the results side by side of different models, chat with them all in the same thread, and you only have one subscription and one login. So if you want to check that out, it is AIbox.ai, and I will leave a link in the description. All right, let's get into what's going on at the White House with the new executive order. So this is going to be signed by President Donald Trump soon. The draft of this came out a little bit after Trump publicly called for a single federal standard to AI. His direct quote was, instead of a patchwork of 50 state regulatory regimes.

1:46With this new order that would come out, the Attorney General, which is Pam Bondi, she would have about 30 days to establish a quote-unquote AI litigation task force, and their only task would be to challenge states and their AI laws. This, I think, is directly pointed at a number of states. I know that Florida is working on legislation. California has already come up with legislation. And so I think the federal government is concerned that if all of the different states enact different AI regulations, that essentially it's a race to the bottom or AI companies are going to just have to cater to the most stringent demands of whatever state has the most regulation, which at this point feels like it's going to be California.

2:24So California would essentially be setting the AI laws for the country. Now, I think there's going to be a lot of arguments about this from all sides. This order was first reported by the information. It's not finalized yet, I'll say. And I think over at the White House, they're like not talking to any reporters about it. But it apparently is also going to direct the Commerce Secretary, who is Howard Letnick, a close ally of Trump, to tell states with contested AI laws that they are ineligible for funds after the Federal Broadband Equity Access and Deployment Program bred. It's more than$42 billion that has been allocated to funding all US states and territories.

3:08And so he would be holding back that funding as it's kind of tied to broadband, I would say technology loosely, but they'll tie that specifically to AI regulation, I believe. The way that the order is currently written, it would be a big win for the AI industry, which is growing a lot. Sam Altman, and of course, Andresen Horwitz, one of the number one VCs, a bunch of other Silicon Valley people are all contesting the kind of state by state policy approach. And I'll be honest, I think it actually is pretty confusing and complicated for a startup and for an AI company to have to deal with every different state creating their own laws.

3:45I think that's going to become a tricky place if we can have something that's just standardized across the entire country that would be like in my opinion the best option so it's kind of tricky because people like myself and I think a lot of people that might take that opinion as well on the one hand you see that as you know like less of a headache for AI startups and maybe we can worry less about regulation and get get a move on with creating innovative products but on the other hand people are saying like oh well you know it's just like Sam Altman telling you know the White House what to do, blah, blah, blah.

4:17At the end of the day, I think the industry leaders, yes, it's in their best interest and they're going to make more money from it. But I also think for users, it's you're going to get a better product and it's probably just a better thing overall. But you know, of course, that's my opinion. It would be a really big blow to state lawmakers across the country who are all trying to make a whole bunch of different bills right now. They're trying to place guardrails on the new technology. I think like personally, beyond just like passing things in in different states, particularly, I think it would be great.

4:48Like I love the guardrails that a lot of these different states or people are are thinking of, I would love it if they could bring it to to the federal government and try to have things pass. Now, I know that is an absolute fiasco and nightmare. So I understand why they don't want to do that. But if there really is a true issue with the AI is creating, you know, guardrails for children or other things like that, I think that you can I think you can publicly shame a lot of the companies into following the rules. And if it's, you know, still a really big issue, I think you could bring it to the federal level and have rules passed that the whole country would have to follow.

5:20Now, I know, I know that a lot, that's not what a lot of people like. So that's, that's definitely like big government probably getting bigger, and the state's getting less control. So I understand why that might not be as popular of an approach. The New York State Assembly member Alex Boros, he co-sponsored a state AI safety bill. And he said that this executive order is, quote, a blank check to Donald Trump's tech billionaire backers who've already made a fortune and now stand to profit exponentially more from allowing unconstrained AI to wipe out jobs, destroy our kids' brains, and drive electricity bills through the roof.

5:54Okay. I, like, I love AI guardrails. And I, so I just, I think it's kind of as the whole industry a disservice when you have someone like Alex Burroughs making in a statement like that that is obviously so politically charged and so like biased right like donald trump's tech billionaires blank check like it seems so politically charged towards donald trump i don't think we want to make this a partisan issue i think we want to just say what is common sense for ai regulation and how can we get the whole country on involved why do we have to make this donald trump versus you know the democrats like like democrats i think traditionally they control california which is where silicon valley comes out of there's a lot of innovation there.

6:33I think we should all try to get along. It's in the best interest of the country, users and the companies. So I don't really like this, this line of talking. And I'll say a couple things that I disagree with here. I like I really appreciate again, the concept of pushing for guardrails and safety when it comes to like, perhaps kids, but saying, you know, unconstrained AI to wipe out our jobs. Okay, so obviously, that means that he is anti progress, Like if the AI can do a job, I think we should be able to use the job. He's saying it's going to wipe out our jobs like we're going to regulate AI to not take a job that it was capable of doing.

7:08So I don't know. I think that's anti-progress. I don't like that line of reasoning at all. And then the other thing is drive electricity bills through the roof. I think he's touching on two things here. one that I'll give him his flowers for is yes I believe a lot of these data centers and these big AI companies are making deals with states particularly so also this is a state problem this isn't a federal problem so really I think he should be talking to other states but states are making deals with a lot of these big companies to give them deals and incentives and tax breaks to build their data centers now they're going to get subsidized electricity costs which what is subsidized electricity costs for data centering it just means that everyone that actually lives there, their electrical bills will go up.

7:50I've seen this in Arizona. When I was living there, our electrical bill is absolutely insane. I've paid$1 ,000 a month for a 1 ,700 square foot home for electricity, which to me, it was just crazy considering that like doubled or tripled since I purchased the home like five years before. So I think that there's definitely like cause to be upset about those things. So as long as he's taking that approach, I'm happy. But I've heard other people and like an angle I've heard other people is like electrical bills are going to go through the roof because we're all using way more AI and we don't have enough like electrical capacity.

8:25So we need to slow down the AI so that we don't do that. I don't like that approach. I think we should build more electrical facilities if we have more electrical demand, not slow down people from building. I've heard some great, I've heard some great ideas. I don't know how many of them are coming through because you know, sometimes you hear these politicians spitball. But like, I think there was a recent talk where Donald Trump was saying every time you're building a data center, we're like, we're authorizing you to build an electrical plant that's attached to it to fuel your data center. I don't know how many people are actually doing this.

8:56I think that this is a good idea. I mean, from a layman's perspective, I'm sure there's experts out there who are like, enraged at me for thinking this outrageous idea is possible. So I mean, I don't know that much about electrical plant facilities and data center buildouts. conceptually, that sounds like a good idea. If you don't want to have to subsidize the electrical bills of these data centers. So I think that there's a lot of interesting things we can do. And I just worry when people are like, we don't want to drive electrical bills through the roof. So we need to slow the AI down. I don't want to slow the AI down.

9:27I want the AI to continue to grow because it's incredibly useful. I think it's going to increase the global standard of living. We're going to have humanoid robots that are going to help us do a lot of chores and tasks. And I believe like I'll be able to do more of what I want to do. So this is my opinion and kind of my this is my the way I'm thinking about all of this. And so I just want to make sure that they're taking that from a good perspective. As this bill gets passed, I'll let you know what rolls out, who's supporting it and how it ultimately progresses and implications that will have in the industry.

9:57Thank you so much for tuning into the podcast today. If you enjoyed the episode, make sure to leave a rating and review wherever you get your podcasts. and also if you want to check out AIbox.ai, I hope it saves you a ton of time and money getting access to all the top AI models for$20 a month on one platform. Thanks so much for tuning in and I'll catch you in the next episode.