May 25: This week in AI federal policy
DC/ai Decoded: A weekly newsletter on developments in artificial intelligence and quantum federal policy
This week decoded
President Trump was expected to sign a highly anticipated executive order establishing a voluntary oversight framework for advanced AI systems, under which developers could submit models for federal review up to 90 days prior to public release. However, the signing was abruptly canceled at the last minute, surprising many administration officials.
The President reportedly raised concerns that the framework could slow U.S. AI development and risk evolving into a de facto mandatory regime, following a meeting in which White House adviser David Sacks expressed industry objections. While the order may be revised and reissued, there is little clarity on the path forward.
The draft order also would have designated the Treasury Department to coordinate with AI companies on identifying cyber vulnerabilities in critical infrastructure, a provision that has reportedly created tension between Treasury Secretary Scott Bessent and Director of National Intelligence Sean Cairncross.
Meanwhile, the Treasury Department is considering a proposal to significantly extend the amount of time taxpayers’ biometric data can be held by third-party contractor ID.me. At NIST, the Hollings Manufacturing Extension Partnership (MEP) announced a competitive pilot program for existing MEP centers to accelerate the adoption and commercialization of advanced manufacturing technologies that enhance the competitiveness of the domestic industrial base. Also, EXIM launched the ExportAI Initiative to strengthen U.S. global competitiveness and accelerate the export of American artificial intelligence technologies by deploying American AI at scale.
Read more below
Congress
Hearings
Last week
On May 19, the Senate Armed Services Emerging Threats and Capabilities Subcommittee held a hearing on “The Science and Technology Priorities in Review of the Defense Authorization Request for FY2027 and the Future Years Defense Program.”
On May 19, the House Select Strategic Competition Between the United States and the Chinese Communist Party Committee held a hearing on “Crime, Corruption, and Power: The Rise of CCP-linked Scam Networks Targeting Americans and Threatening U.S. Security.”
On May 20, the House Financial Services Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee held a hearing on “Partnering for Innovation: How Bank-Fintech Collaborations Enhance Financial Infrastructure.”
On May 21, the House Homeland Security Cybersecurity and Infrastructure Protection Subcommittee held a hearing on “State and Local Cybersecurity: Escalating Threats, Federal Partnership, and the Resilience of America’s Communities.”
Upcoming
On June 23, the Senate Judiciary Committee will hold a hearing titled “Examining Tech Industry Practices and the Implications for Users and Families: Is This Social Media’s Big Tobacco Moment?” to consider issues including AI safety.
Legislation
The Senate passed the Stop Stealing our Chips Act, sponsored by Sens. Mike Rounds (R-SD) and Mark Warner (D-VA), to require BIS to create a public, secure platform for submitting whistleblower reports, establish a fund to cover whistleblower rewards and program operations, and provide confidentiality guarantees and anti-retaliation safeguards to protect whistleblowers. (Press release)
The House Committee on Small Business passed the SBA Artificial Intelligence Utilization Act to require the Small Business Administration (SBA) Administrator to submit an annual report to Congress on the agency’s use of artificial intelligence and machine learning. The bill was sponsored by Reps. Brad Finstad (R-MN) and George Latimer (D-NY). (Press release)
Sens. Ted Budd (R-NC), Jim Banks (R-IN), Catherine Cortez Masto (D-NV), Mike Rounds (R-SD), Lisa Blunt Rochester (D-DE), and Adam Schiff (D-CA) introduced the Fostering Agricultural Research and Modernization through Artificial Intelligence (FARM AI) Act to increase capital for AI projects through U.S. Department of Agriculture (USDA) grants and ensure USDA programs are deployed to educate farmers on the latest AI technologies to advance American production. (Text)
Reps. Suzan DelBene (D-WA), Vern Buchanan (R-FL), and Terri Sewell (D-AL) introduced the Semiconductor Superiority Act to amend the Section 48D Advanced Manufacturing Investment Credit to explicitly include property and infrastructure for space-based semiconductor manufacturing. (Text)
Sens. Kirsten Gillibrand (D‑NY), Ron Wyden (D-OR), Patty Murray (D‑WA), Maria Cantwell (D‑WA), and Richard Blumenthal (D-CT) and 20 additional Senate Democrats introduced a resolution to end a Trump administration program allowing AI to conduct prior authorizations in Medicare medical claims. A House companion resolution was introduced by Reps. Greg Landsman (D-OH) and Suzan DelBene (D-WA). (Resolution)
Reps. María Elvira Salazar (R-FL) and Madeleine Dean (D-PA) reintroduced the Support the Nurture Originals, Foster Art, and Keep Entertainment Safe (NO FAKES) Act to protect Americans’ voice and visual likeness from unauthorized digital replicas created without their consent through artificial intelligence. Companion legislation was introduced in the Senate by Sens. Marsha Blackburn (R-TN) and Chris Coons (D-DE). (Text)
Sen. Ben Ray Luján (D-NM) and Rep. Doris Matsui (D-CA) introduced the Digital Opportunity Foundation Act to establish a nonprofit foundation that would leverage public and private investments to expand digital opportunity nationwide, ensuring that people can access, adopt, and effectively use modern digital tools, broadband, and other emerging technologies. (Text)
Reps. Valerie Foushee (D-NC), Brian Fitzpatrick (R-PA), and Don Beyer (D-VA) and Del. James Moylan (R-GU) introduced a bill to require the National Institute of Standards and Technology to establish task forces to facilitate and inform the development of technical standards and guidelines relating to the identification of content created by generative artificial intelligence. (Text)
Senate Foreign Relations Committee Ranking Member Jeanne Shaheen (D-NH) and Sen. Pete Ricketts (R-NE) introduced the U.S. Technology Procurement and Access to Trusted Hardware (U.S. Tech PATH) Act to establish a State Department-led program to streamline the procurement of U.S. cyber and digital technologies by foreign allies and partners and to ensure that U.S. missions abroad in participating countries are staffed with the relevant experts in cyber and digital technologies. (Text)
Rep. Deborah Ross (D-NC) introduced the Protect Working Musicians Act to give small independent artists and music creators the power to collectively negotiate with both streaming platforms and generative artificial intelligence developers for fair compensation. (Text)
Correspondence
Sens. Martin Heinrich (D-NM) and Ron Wyden (D-OR) and Rep. Sara Jacobs (D-CA) sent letters to the U.S. Department of Justice (DOJ) and Director of National Intelligence (DNI) expressing concern regarding the government’s failure to prevent the sale to China, Iran, and other adversaries of location data collected from Americans’ phones. (Letter)
Senate HELP Committee Chair Bill Cassidy (R-LA) sent a letter to Hims & Hers CEO Andrew Dudum requesting information about a recent data breach and the company’s cybersecurity protocols. (Letter)
Publications and Events
Sen. Mark Kelly (D-AZ) published an article on Substack responding to President Trump’s decision not to sign his AI executive order. (Substack)
The Government Accountability Office (GAO) released a report on Privacy-Enhancing Technologies (PETs). (Report)
Trump Administration
White House
President Trump canceled the signing of an executive order that would have created a voluntary oversight system in which developers of advanced AI models could submit their products to a review by federal agencies as much as 90 days before releasing them. The order could still be rewritten, but the path forward is unclear. (Politico)(Draft Executive Order)
Treasury Department
The Treasury Department is considering a proposal to extend the amount of time taxpayers’ biometric data can be held by third-party contractor ID.me. Currently, the IRS website states that data is automatically deleted, while other sources say the data must be deleted within 24 hours. The proposal under consideration would allow biometric data to be retained by ID.me for as long as the taxpayer’s account is open and 36 months after the account is deleted. (Politico)
On June 16, the Internal Revenue Service will hold a meeting of the Electronic Tax Administration Advisory Committee to discuss technology and data sharing, and artificial intelligence and human-centered design.
Cybersecurity & Infrastructure Security Agency (CISA)
CISA published a form for private sector tech vendors and experts to report the risk of hackers exploiting vulnerabilities. (Form)
National Institute of Standards and Technology (NIST)
The Hollings Manufacturing Extension Partnership (MEP) at NIST announced a competitive pilot program for existing MEP centers to accelerate the adoption and commercialization of advanced manufacturing technologies that enhance the competitiveness of the domestic industrial base. Two manufacturing technology topics have been identified for the pilot program: (1) additive manufacturing for aerospace components; and (2) a domestic critical minerals supply chain. NIST published a Notice of Intent to allow applicants time to develop proposal strategies and establish collaborations among industry, academic, Federal laboratory, and state/local government partners. (Federal Register)
Export-Import Bank of the United States (EXIM)
EXIM launched the ExportAI Initiative to strengthen U.S. global competitiveness and accelerate the export of American artificial intelligence technologies by deploying American AI at scale by leveraging Department of Commerce-designated AI exports to fast-track the global deployment of trusted U.S. technologies before our competitors can gain ground, and unlocking new markets for American exporters by broadening EXIM’s financing reach with bold new pathways purpose-built for the strategic AI transactions. (Press release)
Noteworthy Quotes and Events
ADMINISTRATION
White House
President Trump said about his aborted executive action, “I was hearing concerns, but I was also seeing the concerns myself. I have concerns about it, and I don’t want to approve anything until it’s done properly… I want the industry to be able to continue to win, we’re leading by a lot over China and everybody else, and I want to continue, and I felt it was inhibiting the industry.” (Politico)
On White House adviser David Sacks’ role in persuading President Trump not to sign the executive order, a White House official said, “Then, he called POTUS this morning unbeknownst to anybody, his own staff included, and derailed it.” (Politico)
On the outsized role Treasury Secretary Scott Bessent is playing in the development of AI policy, an Administration official said Bessent is “way more involved in this than I ever could’ve imagined” and his involvement “seemed to grow over the course of the last month after the Office of the National Cyber Director made their initial moves, which were not well received.” (Politico)
In defense of National Cyber Director Sean Cairncross, a White House spokesperson said, “Sean Cairncross and the entire administration are doing excellent work to protect the American people and our nation’s critical infrastructure while also promoting innovation.” (Politico)
The White House posted “President Trump’s Ratepayer Protection Pledge is putting America first. He’s calling on the nation’s leading AI companies to build, bring, or buy 100% of the energy they need for their data centers. No more sticking Americans with the bill.”
Treasury Department
An anonymous IRS employee said of the proposal to extend biometric data retention by ID.me, “The 36-month period after account deletion is scary. How many email accounts have you requested be deleted because you stopped using them? My Hotmail account from my high school days is still active even though I don’t use it.” (Politico)
An IRS spokesperson said, “The IRS has acknowledged that privacy considerations are the reason the Service currently limits ID.me’s biometric data-retention policy for IRS users.” (Politico)
Department of Defense
U.S. Cyber Command launched a new task force with the NSA to study how the Pentagon can deploy private-sector AI models in all aspects of its missions, including “high-side” systems leveraging the most sensitive intelligence. (Politico)
CONGRESS
AI Executive Order Cancellation
Sen. Richard Blumenthal (D-CT) posted “The Trump admin realizes the risks from AI—but then Big Tech pushes back. Pulling away from even voluntary oversight after pressure from industry insiders sends a clear message: billionaire influence still outweighs jobs, national security & accountability. Huge Coincidence? Humongous AI investor SoftBank donated $50 million to Trump’s presidential library & foundation just before Trump withdrew his AI regulatory Executive Order. Brazen corruption seemingly without bounds.
Sen. Mark Kelly (D-AZ) posted “Trump folded on AI – here’s why that matters: Artificial intelligence is moving fast. Faster than most people in Washington are prepared for. It is already changing how people work, how companies operate, how our kids learn, and how countries compete. Powerful, disruptive technology needs serious leadership. That’s why President Trump’s decision to walk away from his own AI executive order this week is such a failure. Not because the order was perfect – it was not. From what has been reported, it would have created a voluntary process for government agencies to evaluate some frontier AI systems for risks and vulnerabilities before public release. I don’t think that goes nearly far enough for a technology changing this rapidly, but even that modest step was apparently too much once a few powerful tech executives pushed back. That should bother everyone. America cannot lead in AI if our policy is determined by whichever billionaire gets the President on the phone last. We need a strategy that supports innovation, protects workers, strengthens national security, and makes sure this technology benefits the country, not just a handful of big tech companies. I have spent a lot of my life around advanced technology. In the Navy, at NASA, and now in the Senate, one thing is clear: when the stakes are high, you do not just hope everything works out. You test. You plan. You ask hard questions. You build safeguards. That is not anti-innovation. That is how serious people handle serious systems and innovate responsibly. AI is going to shape the future of work, our energy grid, cybersecurity, and our competition with China. Getting this right matters for families in Arizona and across the country. We should want American companies to lead the world. But we don’t do that by prioritizing short-term company profits above all else. We need to make sure AI tools are deployed safely and responsibly. The President had a chance to show that he understands that. Instead, when powerful billionaires got him on the phone, he backed down. That is a failure. We can do better than that. And we have seen why we can’t rely on the whims of a president to do that. To truly lead, Congress needs to get in the game with real, forward-looking policy on AI. Read my AI for America plan with some of my ideas for how Congress can do just that.”
Rep. Yvette Clarke (D-NY) posted “Donald Trump’s concern for the health of the AI industry begins and ends with the wealth of those at its top. This EO was not delayed due to its many flaws, but because his Big Tech buddies demanded that it be. These billionaires will always put profit over progress. The president will always follow their orders. And that will always be bad for America.”
Miscellaneous
On the retention of biometric data by ID.me, Sen. Mark Warner (D-VA) said, “Following abuses of taxpayer privacy under the Nixon Administration, Congress established and has maintained a robust set of laws safeguarding taxpayers’ personal information. Taxpayer privacy is critically important, and the IRS should take the utmost care to safeguard taxpayer biometric data.” (Politico)
Rep. Nancy Mace (R-SC) called for a one-year moratorium on new data center construction in South Carolina, saying, “South Carolina is not Big Tech’s personal power grid. These companies are planting massive data centers across our state, driving up energy demand, and leaving families and small businesses to pick up the tab. South Carolinians are already stretched thin. The last thing they need is a higher electricity bill subsidizing Big Tech’s bottom line. A one-year moratorium gives South Carolina the chance to get this right. When it is over, the rules are simple: data centers pay their own way or they do not come here. We don’t want to see eminent domain like what’s happening in Georgia, either.” (Press release)
On proposed Democratic amendments regarding data centers under consideration during the House Appropriations Committee markup of the fiscal year 2027 Energy-Water bill, Rep. Marcy Kaptur (D-OH) said the “New AI and data facilities are causing energy and water prices to skyrocket. The American people are feeling the pinch. This Congress has an obligation to defend our people — not stick our heads in the sand or pretend it’s 1946.” (Politico)
On the potential to add the MATCH Act, Chip Security Act, AI OVERWATCH Act to the NDAA, House Foreign Affairs Chair Brian Mast (R-FL) said, “One of the biggest games in town is always the National Defense Authorization Act.” (Politico)
In the House Select Strategic Competition Between the United States and the Chinese Communist Party Committee hearing on “Crime, Corruption, and Power: The Rise of CCP-linked Scam Networks Targeting Americans and Threatening U.S. Security,” Rep. Darin LaHood (R-IL) said, “Time and time again, victims of fraud and scams wait years before receiving compensation, and criminals who engage in this predatory behavior obviously must be prosecuted to the fullest extent of the law, and victims must be made whole in a timely manner, with increased access to digital infrastructure and advanced technological tools like cryptocurrency and artificial intelligence and fraud, the fraud ecosystems that currently exist, they continue to wreak havoc in many ways on our system, and there is not a, I guess, a good one size fits all approach on how we coordinate on this issue, but I do think it’s fair to say that Congress must ensure we provide the necessary resources and tools to our federal agencies in order to keep up with the evolving scam ecosystem.”
Sen. Mark Kelly (D-AZ) posted “Some reports say we could see 12 million job transitions in the next five years as a result of AI. If we don’t plan now, some Americans may struggle to find consistent, good-paying jobs. My plan: prepare young Americans for an AI economy and rethink how we help workers whose jobs change or who get laid off.”
Rep. Nick Langworthy (R-NY) posted “Because of the ingenuity of our great nation, we went from the stagecoach to SpaceX rockets landing themselves in less than 200 years. We also went from Morse Code to AI. Since American innovation is unmatched, there is no excuse for outdated and barbaric animal testing.”
Sen. Bernie Sanders (I-VT) posted “Question for Musk: You tell us not to worry about the jobs that’ll be wiped out by AI & robotics because the government will provide everyone with “universal high income.” Really? How will that be paid for when you can’t even support a 5% tax on your $817 billion in wealth?”
Sen. Marsha Blackburn (R-TN) posted “Glad to see FTC hold Cox Media Group accountable for using AI to listen to users’ phone conversations. I sent a letter to Cox and its clients (Meta and Google) demanding answers for this egregious invasion of privacy when it first came to light in 2024.”
Sen. Chris Coons (D-DE) posted “Whether you’re an Emmy winner like Noah Wyle or an eighth grader in Wilmington, you deserve to have your voice and likeness protected from unauthorized AI deepfakes. I’m glad to have the support of Noah and sagaftra for my bipartisan NO FAKES Act.”
Rep. Chip Roy (R-TX) posted “Rep. Roy’s Retake of America Day 5: The POWER Act directs the Energy Department to collect and report to Congress the amount of water and energy that large AI data centers use. States like Texas have been enduring extreme drought conditions for years. As Big Tech moves to build out AI infrastructure in the driest parts of our state, we MUST have a full and accurate understanding of how much energy and water these data centers use before giving these facilities tax and permitting advantages.”
Rep. Valerie Foushee (D-NC) posted “AI chatbots are putting the lives of children across the country at risk right now. Congress must establish criminal penalties immediately for companies that allow children to access harmful content through these chatbots.”
Sen. Bernie Sanders (I-VT) posted “I appreciate Mr. Andreessen’s honesty. The oligarchs are making it clear they want to replace human workers with AI & robots and could care less about the suffering they cause. Sorry, Mr. Andreessen: You’re waging war against the working class & we will make sure you will lose.”
Rep. David Schweikert (R-AZ) posted “Health care fraud should not be hiding in a fax machine. If we are going to use AI to find waste and fraud, the data has to come in electronically. Give the tools usable data, and we can find bad actors faster before taxpayers get stuck with the bill.”
Rep. Deborah Ross (D-NC) posted “Independent musicians are largely powerless to negotiate fair prices for their work from AI and streaming platforms. My bill, the Protect Working Musicians Act, allows independent artists to band together to negotiate fair compensation for their work.”
Sen. Ted Budd (R-NC) posted “AI is advancing at a rapid pace, and if we fail to address the barriers to its deployment in agriculture, America’s producers will fall behind. I am proud to be leading the bipartisan FARM AI Act to unlock the untapped potential of AI to advance American agriculture.”
What I’m Reading This Week
To A.I. Executives, We’re All Just ‘Meat Computers’, Lora Kelley, The New York Times.
Inside the British Lab Hunting for Dangers Lurking in A.I., Adam Satariano and Paul Mozur, The New York Times.
One Job That Is Growing in the A.I. Era? Cybersecurity Experts, Kate Conger, The New York Times.
A.I. Bots Told Scientists How to Make Biological Weapons, Gabriel J.X. Dance, The New York Times.
I’m the C.E.O. of Goldman Sachs. The A.I. Job Apocalypse Is Overblown, David Solomon, The New York Times.
About Zero One Strategies
Zero One Strategies is a specialized government relations practice dedicated to navigating the complex landscape of U.S. federal policy in emerging technologies. As advancements in technology continue to outpace regulatory frameworks, Zero One Strategies aims to provide strategic guidance and bipartisan advocacy for innovators and businesses operating at the forefront of technological development.
The practice focuses on key areas such as artificial intelligence, digital assets, blockchain, decentralized technologies, cybersecurity, data, and digital infrastructure, as well as the multiple policy issues impacting these sectors, including tax and financial services.
Contact us at Stacey@ZeroOneStrategies.com
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