Microsoft’s AI Chief Slams Trump’s Controversial AI Regulation Ban

Tech giants clash with Washington as Trump's executive order dismantles AI oversight.

Subheading: Silicon Valley pushes back against deregulation frenzy

Microsoft's AI leadership team publicly condemned the sudden policy shift, calling it 'dangerously shortsighted' during a volatile market period. The move comes as AI stocks hit record highs—because nothing boosts valuations like removing consumer protections.

Industry analysts warn the decision could trigger a regulatory race-to-the-bottom, with one hedge fund manager quipping: 'At least someone's still bullish on unregulated algorithms—Wall Street's high-frequency traders.'

TLDRs:

• Microsoft’s chief scientist warns against Trump-backed AI regulation freeze, citing long-term innovation risks.
• Proposed 10-year ban on state AI laws sparks bipartisan concern in U.S. Senate over corporate overreach.
• Tech giants, lobbying through trade groups, support a national framework to avoid fragmented regulation.
• Global AI competition and regulatory divergence add urgency to the debate over U.S. leadership in AI.

Donald Trump’s proposal to ban state-level regulation of artificial intelligence for the next decade has ignited sharp criticism, most notably from Microsoft’s chief scientist Eric Horvitz.

Speaking at the Association for the Advancement of Artificial Intelligence, Horvitz warned that the proposed moratorium WOULD undermine necessary safeguards for a rapidly evolving technology that poses both enormous promise and significant risks. He argued that thoughtful guidance and accountability are not barriers to innovation but vital components for its success.

The proposed ban, quietly backed by major technology firms and included in a Republican-led tax and spending bill, would tie state access to broadband infrastructure funding to a commitment not to pass new AI laws. This linkage has raised eyebrows on Capitol Hill, with critics calling it an attempt to coerce state compliance and sideline local democratic processes. Despite bipartisan discomfort, the measure was deemed valid under the Senate’s budget reconciliation rules, leaving open the possibility of passage with a simple majority.

Microsoft Scientist Breaks Ranks

Horvitz’s public warning adds a rare voice of dissent from within the tech establishment itself. Although Microsoft has not issued an official statement on the legislation, Horvitz made clear that an unregulated environment could enable dangerous uses of AI, including misinformation campaigns and opaque decision-making systems. His remarks reflect broader concerns that America is at risk of falling behind in the responsible development of AI, especially as global rivals implement stricter governance models.

The contradiction between Horvitz’s call for “guidance and reliability measures” and the industry’s broader lobbying against state-level rules highlights a critical tension. On one hand, companies demand consistency to avoid regulatory headaches; on the other, they resist oversight that might constrain business interests. This discord underscores the complexity of crafting effective AI policy without stifling progress or sacrificing public accountability.

Lobbying Surge Raises Influence Concerns

The intense lobbying effort surrounding the proposed ban illustrates just how high the stakes have become. Between 2022 and 2023, the number of entities lobbying on AI in Washington nearly tripled. Trade groups like Incompas, which represent the interests of companies like Amazon, Meta, and Google, have poured resources into shaping federal policy in ways that preempt local experimentation. These efforts, critics argue, are not merely about harmonizing rules but about consolidating corporate control over one of the century’s most transformative technologies.

While tech executives insist that a patchwork of state regulations would hamper innovation, many lawmakers and experts worry the real danger lies in a regulatory vacuum. Previous technological shifts, from aviation to pharmaceuticals, ultimately benefited from the establishment of safety standards that built public trust and enabled sustainable growth. AI, many argue, is no different.

Global Context Adds Pressure

Internationally, regulatory divergence is accelerating. The European Union has already passed its AI Act, imposing strict standards for high-risk systems. Meanwhile, countries like China are enforcing targeted rules for AI-generated content and algorithmic transparency. In contrast, the U.S. remains split between federal inaction and state-level initiatives, such as California’s push for AI accountability laws. This fragmented approach could weaken the country’s competitive position and complicate operations for global tech firms.

As Senate negotiations continue, the outcome of this debate will shape how the U.S. positions itself in the global AI landscape. Whether the nation chooses centralized control or embraces state-led innovation could determine both its technological edge and its ethical compass in the AI era.