Trump delays AI executive order over undisclosed objections to draft language
Order would have established voluntary pre-release government security reviews of AI models
Briefing
- Trump has postponed signing an executive order on AI, removing near-term regulatory clarity for the sector and leaving AI developers without defined government vetting rules.
- The draft order would have established voluntary government security reviews of AI models before public release, a lighter-touch framework than mandatory pre-clearance.
- Trump said he postponed the signing ceremony because he "didn't like certain aspects of it" and does not "want to get in the way of that leading" – offering no specific objections.
- No revised timeline has been announced, leaving the scope and structure of any final order uncertain for companies planning product releases.
Analysis
- Continued policy uncertainty delays enterprise AI procurement decisions, benefiting incumbents with already-approved government contracts over challengers awaiting regulatory clarity. Large cloud AI providers (Microsoft Azure, Google Cloud, AWS) embedded in federal workflows face no incremental friction, while frontier model developers (Anthropic, OpenAI, xAI) lose the voluntary pre-clearance framework that would have legitimised their models for government buyers. OpenAI's IPO roadshow, targeting September, now lacks a federal policy anchor investors could point to as de-risking government revenue.
Historical Context
- Jan 2025
Biden's October 2023 AI Executive Order was revoked by Trump in January 2025, removing mandatory safety reporting requirements for frontier models. That revocation created the regulatory vacuum the current draft order was meant to partially refill, meaning this delay extends an already 16-month policy gap for AI developers seeking federal guidance.
- 2022–2023
The EU AI Act's multi-year drafting process showed that prolonged regulatory uncertainty caused major US AI developers to deprioritise EU deployment planning. A similar dynamic now risks playing out domestically, where the absence of a defined federal framework pushes compliance planning toward the most restrictive state regimes by default.
Connected Events
OpenAI to file confidentially for IPO as soon as Friday, targeting September listing
OpenAI is targeting a September IPO listing after a confidential filing as soon as Friday; the absence of a federal AI vetting framework removes a key policy de-risking narrative that underwriters and roadshow investors would have used to justify government revenue projections.
California jury dismisses Musk's $150bn lawsuit against OpenAI on statute of limitations
The Musk lawsuit dismissal against OpenAI cleared one legal overhang for the IPO, but the executive order delay reintroduces a policy risk that complicates the government-customer story OpenAI needs to support its valuation in the roadshow.
Further reading
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