Quick Hits

• On January 23, 2025, President Trump signed an executive order to develop an action plan to enhance AI technology’s growth while reviewing and potentially rescinding prior policies to regulate its use.
• The Trump administration is reversing Biden-era guidance on AI and emphasizing the need for minimal barriers to foster innovation and U.S. leadership in artificial intelligence.
• The administration is working closely with tech leaders and has tapped a tech investor and former executive as the newly created White House AI & Crypto Czar to guide policy development in the AI sector.
• State legislators may step in to fill the regulatory gap.

As part of a flurry of executive action during President Donald Trump’s first week of his second term in office, the president rescinded a Biden-era executive order (EO) issued on October 30, 2023, titled the “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence,” which sought to create safeguards for the “responsible development and use of AI.”

Further, on January 23, 2025, President Trump took action to shape the development of AI technology, signing EO 14179, “Removing Barriers to American Leadership in Artificial Intelligence.” The order states, “It is the policy of the United States to sustain and enhance America’s global AI dominance in order to promote human flourishing, economic competitiveness, and national security.”

AI Executive Order

President Trump’s EO 14179 directs that, within 180 days, “relevant” agencies create an “action plan to achieve” the EO’s AI policy. That plan is to be developed by the “Assistant to the President for Science and Technology (APST), the Special Advisor for AI and Crypto, and the Assistant to the President for National Security Affairs (APNSA), in coordination with the Assistant to the President for Economic Policy, the Assistant to the President for Domestic Policy, the Director of the Office of Management and Budget (OMB Director), and the heads of such executive departments and agencies (agencies) as the APST and APNSA deem relevant.”

The order also mandates that these heads of agencies immediately review all policies, directives, regulations, and other actions taken under President Biden’s now-revoked EO 14110 to identify any actions inconsistent with the EO’s policy objectives. The EO states that inconsistent actions will be suspended, revised, or rescinded as appropriate to ensure that federal guidelines and regulations do not impede the nation’s role as an AI leader.

The EO directs the OMB Director, in coordination with the APST, to revise two specific OMB memoranda “as necessary to make them consistent” with the president’s new AI policy:

• OMB Memorandum M-24-10, “Advancing Governance, Innovation, and Risk Management for Agency Use of Artificial Intelligence,” issued in March 2024, which directed the Board of Governors of the Federal Reserve System to submit a biennial AI compliance plan to OMB.
• OMB Memorandum M-24-18, “Advancing the Responsible Acquisition of Artificial Intelligence in Government,” issued in October 2024.

Shifting AI Policy

The Biden administration sought to create safeguards for the development of AI technology and its impact on labor markets, potential displacement of workers, and the use of AI and automated decision-making tools to make employment decisions and evaluate worker performance.

In November 2024, the U.S. Department of Labor (DOL) issued guidance on AI, detailing principles and best practices for employers in using AI in the workplace. That guidance built on prior guidance published by the DOL’s Wage and Hour Division and Office of Federal Contract Compliance Programs. Also, in 2022 and 2023, the U.S. Equal Employment Opportunity Commission (EEOC) issued guidance on employers’ use of AI tools and the potential for discrimination. As of the date of publication of this article, the EEOC’s former AI guidance has been removed from its website.

However, in a fact sheet published on January 23, 2025, the Trump administration stated that the “Biden AI Executive Order established unnecessarily burdensome requirements for companies developing and deploying AI that would stifle private sector innovation and threaten American technological leadership.” According to the fact sheet, the “development of AI systems must be free from ideological bias or engineered social agendas.”

President Trump is also reportedly working closely with many tech company leaders and AI developers. The president tapped investor and former tech executive David Sacks as the newly created “White House AI & Crypto Czar,” who will help shape policy around emerging technologies.

Next Steps

The Trump administration’s shift in AI policy marks a substantial departure from the previous administration’s focus. By rescinding Biden-era executive orders and implementing new directives to foster innovation, the Trump administration seeks to remove perceived barriers to the development of artificial intelligence technology.

Although the new administration has expressed its intent to deregulate this area, many states and jurisdictions have taken a different position, including California, Colorado, Illinois, and New York City. Other states may also consider filling the gap created by the absence of federal agency action on AI in employment.

In light of this, employers may want to continue to implement policies and procedures that protect the workplace from unintended consequences of AI use, including maintaining an AI governance team, establishing policies and practices for the safe use of AI in the workplace, enhancing cybersecurity practices, auditing results to identify and correct unintended consequences (including bias), and maintaining an appropriate level of human oversight.