By: Ryan DePirri
The rapid advancement of artificial intelligence (“AI”) has sparked a regulatory debate in the United States, with successive administrations pushing starkly different visions for governance.[1] The Biden administration’s 2023 executive order on AI emphasized oversight, transparency, and consumer protection, while the Trump administration’s 2025 reversal prioritized deregulation and innovation-driven growth.[2] This shift has profound legal and business implications, creating uncertainty for AI companies and placing the U.S. at odds with global regulatory trends.[3]
Biden’s AI Policy: Oversight and Consumer Protection
In 2023, the Biden administration introduced a comprehensive executive order designed to address AI’s risk.[4] It mandated risk assessments for high-impact AI systems, required watermarking for AI-generated content to curb misinformation, and empowered federal agencies to enforce safety and fairness standards.[5] Biden’s policy focused on striking a balance between fostering AI’s economic potential and mitigating the risks it posed — namely, biases, fraud, and security vulnerabilities.[6] For businesses, this meant higher compliance costs but also the clarity of more structured regulations guiding responsible AI development.[7] By setting clear expectations for transparency and accountability, the administration aimed to ensure that AI advancements would align with public safety and ethical considerations.[8]
Trump’s AI Policy: Deregulation and Innovation-First Governance
In 2025, the Trump administration rescinded Biden’s executive order, signaling a stark departure from AI oversight.[9] This shift, which came less than two years after Biden’s order in 2023, removed federal risk assessment mandates, eliminated AI-generated content labeling requirements, and discouraged agency intervention in FAI-related disputes.[10] By prioritizing minimal government interference, the Trump administration aimed to accelerate AI development and bolster U.S. competitiveness.[11]
However, this approach introduced significant legal uncertainty.[12] AI companies that had invested in compliance efforts under Biden’s framework now faced a deregulated landscape, raising questions about liability, intellectual property protections, and ethical AI deployment.[13] The rollback also positioned the U.S. at odds with global regulatory efforts, potentially complicating cross-border AI collaborations and trade.[14]
The Legal and Business Impact of Regulatory Whiplash
The abrupt shift in AI policy creates instability for businesses navigating compliance requirements.[15] Companies must decide whether to maintain rigorous risk assessment protocols for long-term stability or adapt to the immediate deregulated environment to gain a competitive edge.[16] Additionally, forum shopping — where businesses choose jurisdictions with more favorable regulations — may increase as states like California implement their own AI standards.[17]
Looking Ahead: The Need for a Stable AI Regulatory Framework
The Biden-Trump AI policy shift highlights a bigger challenge: how to create stable, forward-looking regulations for a technology that is evolving rapidly.[18] Innovation is vital, but so is legal clarity, especially if we want AI to develop responsibly.[19] A bipartisan push to get some core rules for AI governance that strike a balance between encouraging growth and managing the technological risks could bring much-needed stability and help the U.S. lead on the global AI stage.
As AI continues to transform industries, businesses and policymakers need to tread carefully through this shifting legal landscape. Without a steady regulatory approach, the U.S. could end up lagging in both AI innovation and legal readiness. The key to long-term, sustainable progress is a clear, consistent framework that keeps pace with technology advances while addressing the real concerns around ethics and security.[20] The challenge lies in creating regulations that do not stifle innovation but ensure accountability, fairness, and privacy.
[1] Compare Exec. Order No. 14,110, 88 Fed. Reg. 75,845 (Nov. 1, 2023), with Exec. Order No. 14,179, 90 Fed. Reg. 4,567 (Jan. 23, 2025) (detailing contrasting approaches to AI regulation under the Biden and Trump administrations).
[2] See Exec. Order No. 14,110, 88 Fed. Reg. 75,845 (Nov. 1, 2023) (calling for the establishment of AI governance frameworks and regulatory standards); Exec. Order No. 14,179, 90 Fed. Reg. 4,567 (Jan. 23, 2025) (focusing on reducing regulatory burdens to foster AI development and competitiveness).
[3] See Mackenzie Holland, Businesses Face Uncertainty with U.S. AI Regulation in 2025, TechTarget (Dec. 6, 2024), https://www.techtarget.com/searchenterpriseai/news/366616914/Businesses-face-uncertainty-with-US-AI-regulation-in-2025.
[4] See Exec. Order No. 14,110, 88 Fed. Reg. 75,845 (Nov. 1, 2023).
[5] See id.
[6] Bridget Neill et al., Key Takeaways from the Biden Administration Executive Order on AI, EY (Oct. 31, 2023), https://www.ey.com/en_us/insights/public-policy/key-takeaways-from-the-biden-administration-executive-order-on-ai.
[7] What Biden’s Executive Order on AI Means for Employers, Tilson (Feb. 2024), https://www.tilsonhr.com/what-bidens-executive-order-on-ai-means-for-employers/.
[8] See id.
[9] See Exec. Order No. 14,179, 90 Fed. Reg. 4,567 (Jan. 23, 2025).
[10] See id.
[11] See Olga Akselrod & Cody Venzke, Trump’s Efforts to Dismantle AI Protections, Explained, ACLU (Feb. 11, 2025), https://www.aclu.org/news/privacy-technology/trumps-efforts-to-dismantle-ai-protections-explained (criticizing the Trump administration’s rollback of Biden-era AI safeguards, including algorithmic accountability and civil rights protections).
[12] See Ferial Saeed, The Uncertain Future of AI Regulation in a Second Trump Term, Stimson (Mar. 13, 2025), https://www.stimson.org/2025/the-uncertain-future-of-ai-regulation-in-a-second-trump-term/ (examining how the lack of comprehensive federal AI legislation and a decentralized oversight model may undermine U.S. leadership and public trust in AI development).
[13] See Akselrod & Venzke, supra note 11 (arguing that dismantling U.S. protections weakens the country’s ability to advocate for robust, rights-based AI regulation on the global stage).
[14] See id.
[15] See id.
[16] See id.
[17] See Joe Mullin, California’s A.B. 412: A Bill That Could Crush Startups and Cement a Big Tech AI Monopoly, Techdirt (Mar. 18, 2025, 3:46 PM), https://www.techdirt.com/2025/03/18/californias-a-b-412-a-bill-that-could-crush-startups-and-cement-a-big-tech-ai-monopoly/ (arguing a potential California bill could create a regulatory environment favorable to large tech companies, potentially stifling innovation and driving smaller businesses to seek more lenient jurisdictions).
[18] See Exec. Order No. 14,110, 88 Fed. Reg. 75,845 (Nov. 1, 2023) (calling for the establishment of AI governance frameworks and regulatory standards); Exec. Order No. 14,179, 90 Fed. Reg. 4,567 (Jan. 23, 2025) (focusing on reducing regulatory burdens to foster AI development and competitiveness).
[19] See Jules Polonetsky, AI Governance in 2025: State and Federal Approaches, Tech Policy Press (Jan. 10, 2025), https://www.techpolicy.press/2025-may-be-the-year-of-ai-legislation-will-we-see-consensus-rules-or-a-patchwork/?utm_source=chatgpt.com (noting that over 700 AI-related bills were introduced in 2024 alone, with an even faster pace in 2025, highlighting the growing legislative focus on AI governance).
[20] Fredrik Filipsson, The Ethics of AI: Balancing Innovation with Responsibility, Redress Compliance (Jan. 19, 2025), https://redresscompliance.com/the-ethics-of-ai-balancing-innovation-with-responsibility/ (highlighting the importance of ethical considerations with regard to AI innovations).
