A warning from Silicon Valley that the United States "could fall behind in the technology race with China" played a decisive role in U.S. President Donald Trump's last-minute decision to hold off on signing an executive order that would have mandated government pre-screening of artificial intelligence (AI) models before their release. Analysts say the direction of U.S. AI governance is being shaped by the pro-business, pro-technology camp rather than the national security line.
"Disadvantage in Competition With China"
The Wall Street Journal (WSJ) reported on Saturday (local time) that David Sacks, a Trump confidant and venture capitalist, spoke directly with the president by phone ahead of the signing ceremony, warning that "the executive order could slow the pace of AI industry development and put the U.S. at a disadvantage in competition with China." Sacks also reportedly stressed that "this executive order would hand a victory to 'AI doomers' who have long called for strong regulation."
Trump, who had been reserved about the executive order from the start, sympathized with Sacks' argument and abruptly delayed signing. According to The Washington Post and Politico, AI company CEOs had already been invited to the White House for the signing ceremony, with some having already arrived in Washington by plane. The venue had also been fully prepared.
Asked by reporters why he had postponed the signing, Trump said, "We are ahead of China and I don't want to do anything that could shake that lead." He added, "I didn't like some of the contents of the executive order," and "I thought (this order) could be a stumbling block."
'PayPal Mafia' Sacks Reverses Policy Through Unofficial Channel
Sacks oversaw policy as the "AI and crypto czar" in the early days of the Trump administration before stepping down from his official post in March of this year. He currently holds the title of co-chair of the White House Council of Advisors on Science and Technology. He is also a key member of the "PayPal Mafia," which built the online payments company PayPal alongside Tesla CEO Elon Musk.
What stands out is that Sacks effectively bypassed the policy-making process. According to the WSJ and The Washington Post, the working-level team — including Michael Kratsios, director of the White House Office of Science and Technology Policy; Will Scharf, staff secretary; and Sean Cairncross, national cyber director — had refined the draft executive order over several weeks and also briefed Sacks. Sacks at the time had reportedly indicated he could "accept" it, but on the morning of the signing ceremony he called Trump directly and reversed his position.
As a result, some White House aides had believed Trump had already approved the executive order and reportedly pushed back strongly against the last-minute intervention.
White House 'AI Policy Clash' Comes to Surface
The shelved executive order reportedly required private companies to share information with the government in advance and undergo safety testing for high-performance AI models they release. In particular, with the successive emergence of cutting-edge models capable of carrying out cyberattacks or detecting software vulnerabilities, the White House security line has maintained that a minimum verification mechanism is needed.
The point of contention was the pre-sharing period. The draft would have required companies to share models with the government 90 days before release, while the industry had been seeking 14 days, according to reports. Politico reported that Sacks conveyed to Trump his concern that "though it is described as voluntary verification, it could effectively turn into a licensing system."
The episode has brought the clash over AI policy lines inside the White House into the open. The pro-business, Silicon Valley camp, which prioritizes the technology hegemony race with China, appears to have overpowered the security and cybersecurity line.
Criticism is also mounting. Steve Bannon, former White House chief strategist, warned that "if you push the pace of AI development too hard, the side effects will eventually bring back even tougher regulation."
