The President and AI Regulation

According to public reports, the Trump Administration recently issued an export control order against Anthropic’s newest models, Fable 5 and Mythos 5. Fable was the publicly available version of its Mythos model, which Anthropic thought was so powerful that it has not released it publicly. Apparently, the Trump administration asked Anthropic to recall Fable from the market after someone evaded guardrails that Anthropic put into Fable to prevent its misuse. When Anthropic didn’t, the Trump administration imposed an export control restriction on the models, under which providing access to any non-U.S. person, including those within the United States and those who work at Anthropic, would be deemed a prohibited export. According to Anthropic, it received notification of the new export controls via letter at 5:21 PM on a Friday, June 12. Because Anthropic cannot know who accesses a model publicly available from any computer with an Internet connection, it was forced to pull Fable from the market.

This episode was greeted with shock, surprise, and even outrage at how the Trump administration is regulating AI’s development and dissemination without legislation from Congress or any semblance of a traditional regulatory process. Indeed, the details as to what happened and why the government acted are not entirely clear because there is no publicly-available policy document, executive order, or other formal account of what action the government was taking and on what legal basis. Commentators have likened the system to FDA-style approval of a drug – but without an FDA or any transparent set of criteria, process, or judicial review.

As sudden and arbitrary as the Trump administration’s action may have seemed, it is not just another example of the rushed and ill-considered use of government power that many view as a hallmark of this administration. In recent years, presidential administrations of both parties have increasingly regulated the US economy – everything from technology regulation to tariffs on imports and investment screening and review – without relying on either explicit congressional authorization or the type of administrative rulemaking that has historically accompanied economic regulation. In fact, the Trump administration’s action is not even the first of its kind with respect to AI. In 2023, President Biden issued an executive order requiring AI companies to perform safety tests on their models, as well as provide the federal government with information about how those models are trained.

This trend reflects a fundamentally new form of economic regulation that, in a recently published article, we call Presidential Regulation. Traditionally, economic regulation occurs through one of two pathways. Either Congress debates and approves legislation directly regulating the economy, or it authorizes administrative agencies, populated by technical experts, to do so after following public notice-and-comment procedures that are then subject to judicial review. By contrast, presidential regulation is when an administration relies on a mix of statutory authority and the president’s own constitutional authority – especially over foreign affairs affairs and national security matters — to regulate the U.S. economy in ways that Congress has not explicitly contemplated or authorized, and without the procedural safeguards or judicial review that accompanies rulemaking by administrative agencies.

Recent developments make presidential regulation particularly appealing to contemporary presidents and their staffs. First, Congress is functionally unable to pass major regulatory statutes, due to political polarization and the filibuster. Where regulation is needed, it has to come from the executive branch. Second, the Supreme Court’s administrative law revolution–which has expanded the president’s constitutional powers while reducing judicial deference to agencies – makes ordinary agency regulation less desirable vis-à-vis presidential regulation. These doctrinal shifts have been undergirded by the rise of expansive theories of presidential power on the right (unitary executive theory) and, albeit to a somewhat lesser degree, left (presidential administration). Finally, courts grant presidents an extraordinary level of deference when it comes to national security and foreign affairs, often referred to as “foreign relations exceptionalism.” When combined with the blurriness in the boundary of what exactly is “domestic” versus “foreign” in a globalized economy, the door is open for presidents to leverage foreign relations powers to regulate the domestic economy.

This is what we are seeing now with AI. The Trump administration’s designation of Anthropic as a supply chain risk in February of 2026 and use of export controls for Fable in June 2026 should be understood as examples of presidential regulation – not merely as examples of the Trump administration’s seeming efforts to extract rents from major US businesses. While we do not know the exact legal justification for the most recent action against Anthropic, these examples are effectively leveraging national security or foreign affairs authorities to regulate AI without any debate, legislation, or process, and with minimal procedural checks.

The result is a less transparent, less accountable, and less stable form of regulation than either legislation or ordinary administrative actions.

To date, AI companies have wanted an unregulated federal regime – and they have even pushed for a ban on any state regulation of AI. But the demand for regulation is like water: it has to go somewhere. Frontier technologies like advanced AI models raise too many policy considerations–to say nothing of the economic competition between technology firms both within and outside the United States–for policymakers to simply turn a blind eye.

In practice, the failure to regulate economically and politically significant developments means that we will get presidential regulation, an idiosyncratic and non-transparent or procedurally irregular system of regulation that will oscillate based on who is president, which company is at issue, and the particular issue. To the average American, it will seem much more like rule by fiat than the rule of law.