If You’re Not First, You’re Last

On Wednesday, President Trump will announce his administration’s AI Action Plan in a much-touted speech on “Winning the AI Race.” As firm believers that America – not China – must lead the world on AI, let’s review how that race is going on this president’s watch.

In October 2022, the Biden administration put controls on the sale to China of chipmaking equipment and advanced chips, which fuel the AI race. A year later, the administration strengthened those controls to crack down on chipmaker workarounds and smuggling through the Middle East. ADVANTAGE: USA 🇺🇸 🇺🇸 🇺🇸

At his confirmation hearing, Trump’s Commerce Secretary Howard Lutnick said chip companies like Nvidia “need to stop helping” China use “our tools to compete with us.” When the Trump administration asked leading American companies for their own AI Action plans, OpenAI and Anthropic both called for tougher chip controls on China. But one man took exception to limiting chip sales to China: America’s leading chip salesman, Nvidia CEO Jensen Huang. After months of wooing the President, Huang somehow managed to convince Trump that the only way America can win the AI race with China is to sell China more AI chips. That’s like saying America won the space race by letting Russia launch Sputnik first. As the New York Times went on to note: “With the change, the Trump administration has also backed away from a signature effort to stay ahead of China in the A.I. race. The U.S. government had been concerned that the Chinese military could use A.I. chips to coordinate attacks and develop weapons and had also wanted to preserve the U.S. lead in developing A.I. systems.” ADVANTAGE: CHINA 🇨🇳 🇨🇳 🇨🇳

In mid-January, a week before Trump took office, the Biden administration issued a sweeping AI diffusion rule to make it much harder for China to smuggle advanced chips through other countries. “It is quite likely that the Trump Administration will find this policy appealing,” the AI director at the Center for Strategic and International Studies told TIME. “It is a pretty decisive move to make life much harder for China’s AI ecosystem.” ADVANTAGE: USA 🇺🇸 🇺🇸 🇺🇸

Instead, the Trump administration reversed course and repealed the AI diffusion rule. That decision was a win not only for chipmakers, but also for Saudi Arabia, Qatar, and the United Arab Emirates. Persian Gulf states dangled their sovereign wealth to lure the administration into offshoring an industry critical to our economic future — repeating the same mistake America made in offshoring the manufacture of semiconductor chips, which we invented. Shortly after scrapping the diffusion rule, Trump visited the Gulf to open the chip gates for massive data centers in Saudi Arabia and Qatar, promising a Middle East that “exports technology, not terrorism.” But the House Select Committee on the Chinese Communist Party has repeatedly warned that G42 — the leading AI company in the Gulf — has a troubling history of ties to China, which the AI diffusion rule was designed to help address. On Thursday, the Wall Street Journal reported that some administration officials are now holding up the UAE deal over “concerns that China could find ways to access the advanced chips through G42 or other UAE entities and personnel.” ADVANTAGE: CHINA 🇨🇳 🇨🇳 🇨🇳

Earlier this month, the U.S. Senate voted 99-1 to defeat a moratorium on state AI laws — thanks to an overwhelming bipartisan outcry that far from accelerating AI development, shutting down the laboratories of democracy would accelerate a widespread AI backlash. ADVANTAGE: USA 🇺🇸 🇺🇸 🇺🇸

Alas, a few days later, the Republican Congress narrowly approved the biggest budget buster in history. The massive debt burden from that bill will increase interest rates on the massive nationwide buildup America needs in AI infrastructure. ADVANTAGE: CHINA 🇨🇳 🇨🇳 🇨🇳

A few days before leaving office, President Biden issued an executive order on “Advancing United States Leadership in Artificial Intelligence Infrastructure.” His order directed the Energy and Defense Departments to lease federal lands for massive AI data centers and speed permitting and grid connections to get data centers online as fast as possible. Electricity demand is growing so quickly that an S&P Global Commodities Insights report predicts the U.S. will need 900 GW from batteries and renewables and 60-100 GW from natural gas. The Biden order also pledged to help AI companies meet their commitment to using clean energy, which along with battery storage will add 93% of the U.S. grid’s new capacity this year. ADVANTAGE: USA 🇺🇸 🇺🇸 🇺🇸

On his first day in office, President Trump set aside Biden’s order on AI infrastructure. On Wednesday, he’ll finally get around to issuing his own. That’s not repealing; it’s just repeating. Ironically, his first step to speed up AI infrastructure comes after putting the Biden order to speed up AI infrastructure on ice for six months. The administration wants to fuel new data centers with natural gas, but the Times points out that the backlog for gas turbines is so long, a company setting out now to build a new plant wouldn’t get it online before 2030. Meanwhile, last week the President seems to have summarily killed the largest privately funded energy transmission project in U.S. history, designed to carry electricity from Kansas wind farms to four Midwestern states. Trump’s “Big, Beautiful Bill” also kneecaps renewable power at a time we need it most. Instead of making it harder to add those new power sources to the grid, we should try to match the tremendous growth of China’s clean power sector and make it easier to bring new power projects online. ADVANTAGE: CHINA 🇨🇳 🇨🇳 🇨🇳

We don’t need AGI to figure out that winning the AI race starts by beating China. In the AI race, the immortal words of Will Ferrell hold true: If you’re not first, you’re last.