President Trump is betting his presidency — and the future of the GOP — on lightly regulated, fast expansion of AI.
Why it matters: Yes, Trump zigs and zags into countless political and diplomatic issues. But none comes close to his sustained, and surging, all-in alliance with tech billionaires and AI companies reshaping the U.S. economy.
He won on the backs of working-class MAGA. But he governs, socializes and surrounds himself with tech swells and moguls.
- From his inauguration to last month's glitzy White House dinner for the Saudis, Trump basks in the support, gifts and affirmation of the most famous AI leaders and companies in the world.
The big picture: Trump has essentially fused Silicon Valley and government in a race to both beat China to all-powerful AI and rescue an economy that's treading water outside of the AI boom. He has rolled back regulations, awarded huge contracts, and downplayed concerns about AI safety or downside risk.
- Trump has prioritized maintaining U.S. dominance in AI, including a Week 1 executive order, "Removing Barriers to American Leadership in Artificial Intelligence" ... in July, an AI action plan, "Winning the AI Race" ... and last month, a "Genesis Mission" to "unleash a new age of AI‑accelerated innovation and discovery that can solve the most challenging problems of this century."
Tech companies have been partially shielded from some tariffs. AI companies will benefit from foreign investment promised to U.S. cities for chip plants and data centers. And Trump has helped broker deals that benefit U.S. AI companies in the Middle East and elsewhere.
- On a Joe Rogan podcast this past week, Nvidia co-founder and CEO Jensen Huang said Trump "saved the AI industry." Huang told us Trump responds to his texts at any hour. In Washington meetings, Huang is pushing back against national security objections to Nvidia selling its prized AI chips in China, saying restrictions haven't slowed Chinese AI.
The White House argues AI will augment, not replace, workers by making them more productive — and that jobs will be created in manufacturing, construction and energy services as America builds the physical infrastructure to support galloping AI.
- Kevin Hassett, director of Trump's National Economic Council, said on Fox Business this past week: "The AI economy is moving much faster than the dot-com economy in the '90s. And the coaches [co-pilots] that AI is producing are going to help make a lot of productive workers a heck of a lot of money."
The political risk: Trump is flooring the gas pedal at the very moment some of his most ardent MAGA backers are warning AI could destroy the working-class Americans who brought him to power. The fear is that AI and AI-powered robots will eat vital American jobs before the nation has time to prepare the U.S. workforce for sci-fi-level change.
Steve Bannon — host of "War Room," one of the most influential MAGA podcasts — has been privately and publicly lighting up the administration, calling the new tech alliance "crony capitalism" and warning that the "technocratic elite" are building a future threatening the jobs of much of the MAGA base.
- Bannon told us that catering to "arrogant" Big Tech is a trap for Trump, since such policies will be a loser with his hardcore supporters.
- "The broligarchs are detested not simply by MAGA but America as a whole — they actually unite the populist left and right," Bannon said. "The tech bros will be the first to jump ship when the midterm fight turns ugly, as surely it will."
The economic split: The data backs Bannon's fear.
- While the AI sector is booming, traditional manufacturing is shedding jobs and losing business, weighed down by the administration's aggressive new tariffs — the opposite of what was supposed to happen.
Reality check: If AI were a political candidate, it would be getting clobbered. Poll after poll shows deep concern about AI, especially among young people, and particularly among those nervous about getting or keeping a job.
- Because Trump is the AI president, and because his views are de facto GOP orthodoxy, Republicans are the AI party, even if some like Bannon or Sen. Josh Hawley (R-Mo.) are sounding alarms about high AI risk for kids, jobs and safety.
Between the lines: The administration has pushed away regulation by trying to block state-level AI rules. Sen. Ted Cruz (R-Texas) and House Majority Leader Steve Scalise (R-La.) have pushed language to preempt state action, most recently in the annual defense bill, Axios tech policy reporters Maria Curi and Ashley Gold tell us.
- Congress has rejected these efforts twice now. So the administration is turning to executive action. The White House's AI action plan aims to slash red tape as part of a hands-off, pro-growth approach.
The intrigue: A leaked executive order that would have made internet grants and other federal funds conditional on limiting AI regulation was put on hold but is back in play, sources tell Axios.
- Such a move would likely face legal battles and anger MAGA types, who view it as a giveaway to the tech industry.
The bottom line: If White House AI and crypto czar David Sacks and others are right that AI juices economic growth and new jobs, Republicans will likely prosper. But if they're wrong, or the benefits come after a few years of pain, it could be politically catastrophic. That's Bannon's big concern.
- Go deeper ... "Behind the Curtain: Anti-AI socialist scenario."
