A leaked document reveals that David Sachs tried to kill state AI laws

On Wednesday, a rumor began to emerge in Washington about a momentous policy change: The White House will reportedly issue an executive order on Friday that would finally preempt state AI laws, handing those regulatory powers over to the federal government. The moment the letter leaked online, lawyers and policymakers began scrutinizing every sentence. There was much that seemed politically unfeasible. There was even more that seemed excessive, and perhaps illegal. There were a lot of agencies that were suddenly cut.

But more importantly, they noticed how much power was going to be handed over to a certain South African tech billionaire turned private government employee who made his way through the tunnel into the West Wing — not Elon Musk, but… last one.

In each section of the draft order, President Donald Trump was directing his Cabinet secretaries and agency heads to issue forthcoming reports and guidance on how to punish countries with AI laws, within the next 90 days. In the case of the Attorney General, he had 30 days to create a full legal task force to prosecute those states. Each of them will have to consult with David Sachs, a special advisor on artificial intelligence and cryptocurrencies — and one of the world’s most influential venture capitalists — as they execute the order.

“I don’t want to say it was a power grab. That’s too strong a term,” said a technology policy adviser close to the White House. “But it is definitely a strengthening of his authority.”

The MAGA world immediately exploded War room Host Steve Bannon — who managed to help kill a previous attempt to ban AI in the Senate this year — devoted part of his show on Friday to the draft order. In Congress, Democrats openly revolted; Technology-skeptical Republicans have been quietly preparing their statements. The AI ​​policy world immediately released reports showing how much power that would have been absorbed into the hands of the White House. The order was scheduled to be signed on Friday, but it never happened.

Outside the White House, the AI ​​executive order, had it been signed, would have been legally unenforceable. But inside the White House, it could have been treated as an imperial mandate. Trump’s executive orders are historically designed to force his subordinates to do his will Immediatelylegality be damned, and the repercussions tend to be irreversible by the time the courts find his actions illegal. For example, his tariff order may soon be overturned by the Supreme Court, but not before causing trillions in economic losses and damaging US international relations.

When we asked for comment, Carolyn Levitt’s White House press office email declined to comment on the record, instead persistently asking us to name our sources.

From there, it would be used as a threat against countries. “I think if it’s effective, the most effective part of it will have a chilling effect on state legislation,” said Charlie Bullock, a senior research fellow at the Institute for Law and Artificial Intelligence. Edge. One section of the bill would have allowed the government to withdraw any federal funding from states that violate the order — not just rural broadband grants, which have been used as leverage in previous preemption fights, but anything from highway funds to education grants. “Even if (the state) can win a lawsuit to eventually get them this funding, it will take a long time. States may be convinced by that.”

As such, he could have turned Sachs into the gatekeeper of US AI policy in one fell swoop.

Although there are several White House officials with ties to the tech industry, Sachs, who has temporary government employment status, is viewed by Washington insiders as Trump’s closest conduit to big-name tech CEOs, who view him as a peer. (Although Vice President J.D. Vance worked in Silicon Valley before entering politics, he never broke into the Three Comma Club.)

“He’s trying to preserve America’s competitive advantage in the big picture, and you could say, in a more selfish way, he’s trying to protect the tech industry (through) a more narrow policy,” he added. These are my people said a technology policy adviser close to the White House.

But Sachs was also trying to neutralize a third internal threat: political forces within the executive branch, both from the progressive left and from the hard MAGA right, that were hellbent on limiting his influence.

Even in this hyperpartisan climate, left and right share a common cause of regulating the excesses of Big Tech, and will do so. Join forces openly to oppose them. It seems to be happening behind the scenes as well. As a tech policy consultant described it, the informal internal anti-Sachs coalition consists of the remnants of the Democratic Biden administration “which was highly regulated and wants to break up tech companies,” and the hard-right MAGA officials in his current administration “who don’t trust technology, and similarly want to regulate and bring tech companies — both state and federal — into compliance.”

According to those who analyzed the draft law, it would have clarified which entities were completely excluded.

The first step, observed by technology policy experts, was to determine who was excluded. In 2023, President Joe Biden’s massive executive order on AI enabled a wide range of agencies to develop AI policy, most of which — if not all — was suddenly absent. For example, the National Institute of Standards and Technology (NIST) is mandated to research and evaluate AI risk management and develop standards. (These concerns, by the way, were recently encoded into California’s AI Safety Act — a law that the AI ​​industry has vehemently opposed.) There is also no mention of the Office of Science and Technology Policy (OSTP), which collects technology management policies in one place before presenting them to the president; The Cybersecurity and Infrastructure Security Agency (CISA), a Department of Homeland Security agency that focuses on cyber threats to national security; Or the Center for Artificial Intelligence and Innovation Standards (CAISI), whose name speaks for itself.

“Maybe in practice, David Sachs will consult with them and (the Office of Legislative Affairs) may reach out to them,” said Ricky Barrick, policy director for the bipartisan coalition and a former Biden administration lawyer. “But it’s surprising it’s not on the list.”

Instead, the proposed moratorium would have been implemented by four agencies: the Justice Department, which would have sued states for violating the order; the Department of Commerce, which will analyze which states may lose broadband funding; the Federal Trade Commission, which would have investigated to identify states that may have engaged in “deceptive conduct” due to ideological bias; and the Federal Communications Commission, which would have established a federal standard for reporting AI.

Naturally, Sachs will take advice from everyone, and they all now have the ability to pursue ways to punish countries that wrote or implemented AI laws.

Populist Republicans, especially those of the MAGA base, saw immediately how much influence Sachs had on the entire system, and how much the system threatened any state. Although they briefly aligned with the tech right in Trump’s election, Republicans have increasingly turned on their allies over a complete ideological mismatch: They believe that artificial intelligence is a threat to conservative family values They will steal American jobs, are allergic to federal incursions into state sovereignty, and have a general disdain for how quickly tech CEOs switched from supporting Democrats to Trump. Many red states have begun writing their own AI regulationsGovernors such as Ron DeSantis in Florida and Sarah Huckabee Sanders in Arkansas have publicly expressed their opposition to the moratorium. Even Trump’s explicit support for the moratorium did not sway the base.

“From a purely political strategy standpoint, the GOP base is not with David Sachs and (fellow Trump supporter and venture capitalist) Marc Andreessen on this. They’re not,” said Brendan Steinhauser, a longtime Republican strategist and CEO of the bipartisan Alliance for Safe AI. “And I don’t think they care because they’re like, It doesn’t matter to us. We’re here to get what we want, and there are three years left in this administration. We were Harris, Biden, and Hillary supporters, and then we became Trump supporters because it was convenient.“

The AI ​​world did not anticipate that MAGA would immediately try to discourage them, even joining forces with progressive anti-tech factions in the government, and that their aggressive approach to Silicon Valley via executive order would have further widened the rift. But it was enough for them to retreat temporarily. The following week, a new rumor spread in Washington that the administration would sign an order related to artificial intelligence, which they did, but otherwise A completely different, non-proactive and completely non-controversial project Directing national laboratories to participate more in the development of artificial intelligence.

The special advisor on artificial intelligence and cryptography is mentioned only once.

Update November 25: Added comment from the White House Press Office.