Come next week, Republicans in control of both chambers of Congress and the White House will have an open field to craft tech policy — if they don’t get in their own way. Their decisions could make the difference between staying ahead on artificial intelligence in the long term, or falling behind rivals like China as the technology gallops ahead. Whoever dominates in AI is expected to wield significant geopolitical power and economic prosperity. But tensions have begun emerging around tech priorities like high-skilled immigration, AI legislation and trade restrictions to block China, with plenty of room for Silicon Valley conservatives to clash with President-elect Donald Trump’s populist base. Those fault lines came into relief at the POLITICO Playbook: The First 100 Days event held in Washington Tuesday, giving a window onto how Republicans who agree on the need to stay ahead on AI may still fight bitterly over how to get there. Immigration will be a top political football. President-elect Trump’s former advisor Steve Bannon went after tech billionaire and self-described “first buddy” Elon Musk at the outset of the event for his support of high-skilled immigration. “Going forward, it’s going to be quite tense,” Bannon told POLITICO White House bureau chief Dasha Burns. “I think we’ll get Elon there. And as soon as I can turn Elon Musk from a techno feudalist to a populist nationalist, we’ll start making real progress.” The tech industry is calling for high-skilled immigration reform to make it easier for foreign experts, including top AI developers and chip designers, to work in the U.S. — without which Musk warns “America will LOSE.” In particular, the issue of H1-B visas has become a lightning rod for MAGA infighting, with Musk vowing to “go to war” to defend them against Bannon and current Trump world figures like deputy chief of staff Stephen Miller, who want to do away with the program and restrict even legal immigration. Which comes first? Republican Sen. John Curtis of Utah said putting “guardrails” into place would be more valuable to the U.S. AI industry than government incentives. “The only thing that’s holding things back is not money. When we don’t put guardrails out, everybody’s scared,” he said on a panel hosted by POLITICO Tech host Steven Overly. “My guess is if we did our job, put the guardrails out there, free market would go crazy.” But Curtis’ colleagues are not on the same page about how far those rules should go. Sen. Ted Cruz (R-Texas), the chair of the Senate Commerce Committee, has called for “narrowly focused solutions” and warned against “an overly aggressive regulatory approach to AI.” Majority Leader John Thune previously told POLITICO he hoped to “find a path forward” with Cruz to pass AI rules that don’t “squash innovation” but do “mitigate some of the riskier applications.” Meanwhile, the industry is making demands of its own. OpenAI wants the federal government and state leaders to offer massive incentives for the buildout of data centers and power facilities. Vice president of global affairs Chris Lehane made the case again Tuesday. The company has been beefing up its D.C. team, and OpenAI CEO Sam Altman donated $1 million to Trump’s inauguration. Lehane pointed to China’s DeepSeek large language model, developed at a laughably low reported cost of about $5 million, as a “Sputnik moment.” “To be able to prevail on AI, for democratic U.S.-led AI to continue to lead the world, that’s ultimately an infrastructure exercise,” he said on a panel. “This country reacted to Sputnik in the '50s by putting its foot on the gas pedal and winning. We absolutely have to play to win.” There are disagreements over not only the best way to promote American AI, but also to guard against competition from Beijing and its push to build a cutting-edge AI industry. This week, the Biden administration plunged tech industry groups and every corner of the AI value chain — from GPU designers and chipmakers to their materials suppliers and cloud providers — into a firestorm of outrage by issuing its most expansive set of high-tech export controls yet. The restrictions essentially govern AI’s global spread by creating a tiered licensing regime that covers most countries — including American allies — and placing specific caps on their access to frontier AI technologies like chips and certain model weights. The Semiconductor Industry Association and Information Technology Industry Council have pleaded with the Trump administration to reverse the rule. They along with four other trade groups wrote a letter to Biden Monday urging him to cease publication. Nazak Nikakhtar, a former Trump Commerce Department official, said the new administration would likely agree with the rule’s “imperative” but not its “extremely flawed” execution of “arbitrary caps.” “I’m hopeful that the Trump administration will fix it,” she added. But the rule has the backing of Republican China hawks including House China Chair John Moolenaar (R-Mich.) and Trump’s former National Security Council official Matthew Pottinger, who penned an op-ed calling it the way for the president-elect to keep America’s AI advantage in the race against China. That will leave Trump as the arbiter of debates around staying tough on China without crushing U.S. companies. And he may have a reason to keep the export controls in place: Under Biden’s restrictions, some countries will have to negotiate with Trump if they want large amounts of advanced AI chips — giving Trump leverage to pursue his goals on the global stage.
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