Trump halts AI executive order over concerns of slowing US progress

President Donald Trump halted the signing of an AI oversight executive order on May 21, pulling the plug just hours before it was scheduled to take effect. The reason: he worried it would slow down the very industry the US is racing to dominate.

The proposed order would have created a voluntary framework allowing the federal government to review advanced AI models from major tech companies, including OpenAI, Google, Microsoft, xAI, and Anthropic. The reviews were designed to facilitate national security assessments and cybersecurity evaluations before these systems reached the public.

China looms large over the decision

Trump’s reversal came in the context of a direct dialogue with Chinese President Xi Jinping, during which the two leaders discussed AI leadership. Trump reportedly emphasized the importance of maintaining the US lead in AI development and flagged the risks of bureaucratic delays that could erode that advantage.

A pattern of deregulation, not an isolated move

This isn’t Trump’s first swing at rolling back AI oversight. In January 2025, shortly after taking office, his administration revoked the Biden-era AI executive order, which had established more comprehensive reporting requirements and safety benchmarks for frontier AI models. That same month, Trump issued Executive Order 14179, explicitly aimed at clearing obstacles hindering US AI capabilities.

David Sacks, serving as White House AI & Crypto Czar, has been a central figure in shaping this posture. His dual portfolio, covering both AI deregulation and cryptocurrency policy, reflects the administration’s view that these two sectors share a common need: less government interference, faster iteration, and clearer signals to capital markets that Washington isn’t going to be the bottleneck.

What this means for investors

For the major AI companies named in the halted order, the immediate effect is clarity through absence. OpenAI, Google, Microsoft, xAI, and Anthropic will not face even a voluntary government review process for their frontier models. That’s one fewer variable in their deployment timelines and one fewer potential source of negative headlines about models failing government safety assessments.

Projects building at the intersection of AI and decentralized technologies benefit from a regulatory environment that treats both AI and crypto as sectors to be encouraged rather than contained. The absence of new AI oversight reduces the chance that adjacent crypto-AI projects get caught in crossfire regulation.

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