The AI industry that spent millions to elect a deregulation-friendly president is now asking for the very thing it fought against: formal AI governance rules. Executives at frontier AI companies are telling policymakers that the Trump administration's unpredictable, case-by-case approach to AI oversight is far more damaging to their business than any structured regulatory framework would be.

What Changed Between Trump's Election and Now?

When Donald Trump entered his second term, Silicon Valley billionaires had just finished funding his campaign with promises that he would leave AI technology alone. Trump's first year in office seemed to deliver on that promise. He focused on stopping states from regulating AI and signed a voluntary executive order on June 2 asking companies to submit models for 30-day review before release.

But the voluntary framework collapsed almost immediately under real-world pressure. On June 12, the White House imposed export controls on Anthropic's Mythos 5 and Fable 5 models after Amazon's CEO raised security concerns with the Treasury Secretary. This week, the administration pressured OpenAI to restrict its latest model, Sol, to roughly 20 government-approved partners, marking the first time a US company launched a frontier model under a government-managed access list.

The result feels less like deregulation and more like something worse from the industry's perspective: unpredictable, ad hoc restrictions that change by the day.

Why Is Unpredictable Regulation Worse Than Formal Rules?

One senior AI executive, granted anonymity by Politico, called the current situation "a de facto European-style licensing regime." The difference is that Europe's approach is at least transparent and predictable. What's happening now is neither.

Industry leaders worry that aggressive lobbying could invite retaliation. "It feels like they're walking on eggshells a little bit," said one AI policy adviser who works with major frontier labs, according to reporting on the situation. Companies fear that pushing too hard for clarity might result in export controls or other regulatory punishment.

"There is a real need for a formal process," said Paul Lekas, head of global public policy at the Software and Information Industry Association, which represents leading AI companies. "We want to avoid releases based on an ad hoc process and a one-off license."

Paul Lekas, Head of Global Public Policy at the Software and Information Industry Association

The industry is now developing what Lekas called "a coordinated push for an actual framework" on advanced AI rules and wants Washington to codify it, whether through executive order or legislation.

How Are Former Officials Reacting to This Shift?

Saif Khan, who served as senior adviser on critical and emerging technology at the Commerce Department under Biden, offered a blunt assessment of what went wrong. He told Politico that the Trump administration's approach is an overreaction born of earlier dismissiveness about AI risks.

"Because there has been some dismissiveness of the risks, there's been no preparatory work, no hiring of experts. The result is opaque, almost vibes-based," Khan explained.

Saif Khan, Former Senior Adviser on Critical and Emerging Technology at the Commerce Department

Khan argued that the administration's actions amount to "an almost complete moratorium on new releases" that will "start seriously impacting companies' bottom lines," calling it far more damaging than anything Biden had proposed. The Biden administration's own final rule would have imposed export controls on chips and AI model weights for certain countries, but never attempted to block domestic releases.

Khan

Dean Ball, a former Trump administration official who authored the White House AI Action Plan and is joining OpenAI as head of strategic futures on July 6, acknowledged the tension between legitimate concerns and overreaction. "The administration's concerns are 100 percent legitimate, but they are likely overreacting to these legitimate concerns," Ball said.

Steps for Understanding the Current AI Governance Landscape

• Track Executive Actions: Monitor White House executive orders and voluntary frameworks, as these are currently the primary tools shaping AI policy rather than formal legislation or regulatory agencies.
• Watch for Export Controls: Pay attention to which AI models face export restrictions or access limitations, as these decisions appear to be made on a case-by-case basis without clear public criteria.
• Follow Industry Coordination Efforts: Industry groups like the Software and Information Industry Association are pushing for formal frameworks, so their public statements and policy proposals signal where regulation may be heading.

What Happens Next?

On Friday, the administration partially rescinded the Anthropic export ban, allowing Mythos 5 to be shared with more than 100 approved companies. However, Fable 5 remains blocked for reasons the government has not explained.

An OpenAI executive told Politico that the industry expects the administration to finalize its June 2 executive order soon and replace the current crackdown with the voluntary vetting framework it originally outlined. Lekas warned that if AI companies cannot agree on a standardized approach to safety, they will keep receiving the same unpredictable treatment.

White House spokesperson Liz Huston defended the president's record, citing fast-tracked permits for AI infrastructure and the executive order aimed at stopping state-level regulation. "President Trump has clearly and repeatedly articulated his goal: ensure continued American dominance in AI," Huston said.

The irony is stark. The industry that spent heavily to avoid regulation is now discovering that the absence of clear rules can be worse than having them. What started as a deregulation victory may end with the tech industry accepting formal governance structures it once fought against, simply because predictability matters more than freedom from oversight.