Trump's AI Approach: Deregulation and Free Speech

As Donald Trump prepares to re-enter the White House, investors and tech enthusiasts alike are wondering how he will approach artificial intelligence (AI) this time around. His first term offers valuable clues, hinting at a deregulatory approach that prioritizes industry-friendly policies and free speech. However, this approach may come with its own set of challenges and risks.
During his first term, Trump signed the American AI Initiative via Executive Order 13859 in 2019, which emphasized increasing AI research investment, setting AI technical standards, and building America's AI workforce. While this initiative did not focus on regulation, it laid the groundwork for a more industry-friendly approach to AI. Trump's administration also criticized Biden's AI executive order, suggesting a continuation of this stance.
Trump's support for AI development "rooted in Free Speech and Human Flourishing" could have significant implications for the industry. While he has promised to repeal Biden's executive order on AI, which emphasizes safety and responsibility, Trump's focus on free speech and human flourishing might lead to a more industry-friendly approach. This could involve reducing regulatory burdens, encouraging innovation, and promoting AI development in areas that align with his political agenda.
However, it's crucial to consider the potential risks associated with this approach. A lack of stringent regulation could exacerbate concerns about AI-associated risks to public safety, data privacy, and algorithmic bias. To balance these interests, Trump may need to work with AI companies to develop industry-led safety standards and guidelines, while also encouraging international cooperation to address global AI challenges.
Trump's trade policies, such as tariffs on GPU imports, could also impact the AI industry's access to technology and capital. A 10% tariff on all US imports and a 60% tariff on Chinese products could significantly impact AI development, as GPUs are crucial for AI training and inference tasks. This could hinder AI development and innovation, potentially slowing US AI progress.

To mitigate these risks, investors should consider focusing on stable, income-generating investments, such as utilities, renewable energy, and REITs. These sectors offer consistent, inflation-protected income and are less susceptible to the volatility and uncertainty associated with AI ventures. For example, the Cohen & Steers Quality Income Realty Fund (RQI) provides stable yields and potential for capital gains, while the XAI Octagon Floating Rate & Alternative Income Trust (XFLT) offers diversification and adaptability.
In conclusion, Trump's approach to AI this time around is likely to be industry-friendly and focused on free speech. While this approach may boost innovation, it could also exacerbate AI-associated risks. Investors should consider the potential implications and prioritize stable, income-generating investments to secure steady returns. As the AI landscape continues to evolve, it is essential to stay informed and adaptable to capitalize on market opportunities and mitigate risks.