{"id":116560,"date":"2025-08-15T18:00:00","date_gmt":"2025-08-15T22:00:00","guid":{"rendered":"https:\/\/www.freethink.com\/?post_type=ftm_article&#038;p=116560"},"modified":"2025-08-15T15:26:59","modified_gmt":"2025-08-15T19:26:59","slug":"governing-agi","status":"publish","type":"ftm_article","link":"https:\/\/www.freethink.com\/artificial-intelligence\/governing-agi","title":{"rendered":"Governing AGI: Model laws, chip wars, and sovereign AI"},"content":{"rendered":"\n<p>Historically, the US government hasn\u2019t excelled at regulating technology. Nobody really has. Maybe it\u2019s because tech evolves too quickly, or because most politicians aren\u2019t developers and simply don\u2019t understand what they\u2019re trying to regulate and can\u2019t see all the potential consequences of their actions.\u00a0<\/p>\n\n\n\n<p>Take the 1990s, when US lawmakers capped exported software at 40-bit encryption keys to keep strong cryptography out of foreign hands. They didn\u2019t foresee tech companies balking at the need to maintain separate US-only and international versions, and as a result of their regulations, the weaker standard <a href=\"https:\/\/www.wired.com\/1996\/03\/crackers\">became the global default<\/a>, undermining security everywhere, even in the US.&nbsp;<\/p>\n\n\n\n<p>We now have AI capable of completing <a href=\"https:\/\/metr.org\/blog\/2025-03-19-measuring-ai-ability-to-complete-long-tasks\/\">multi-hour tasks<\/a>, and the length of tasks it can complete is doubling every seven months. AGI is on the horizon. And the US government is once again attempting to shape the future of tech through regulation. It\u2019s had limited success so far \u2014 and the pace of improvement means that it needs to decide its next steps relatively soon.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-model-restrictions\">Model restrictions<\/h3>\n\n\n\n<p>When AI started to emerge in the public consciousness as potentially something big \u2014 circa the release of ChatGPT \u2014 the US government, despite being composed of multiple factions with competing interests, made a coordinated policy push to try to slow AI\u2019s development by regulating the models themselves. It was afraid of the future and sought to control the immensely powerful groups building these technologies with crude thresholds and onerous paperwork.<\/p>\n\n\n\n<p>The White House Office of Science and Technology Policy (OSTP) introduced the <a href=\"https:\/\/www.govinfo.gov\/content\/pkg\/GOVPUB-PREX23-PURL-gpo193638\/pdf\/GOVPUB-PREX23-PURL-gpo193638.pdf\">AI Bill of Rights<\/a> in 2022. In 2023, President Joe Biden signed the <a href=\"https:\/\/bidenwhitehouse.archives.gov\/briefing-room\/presidential-actions\/2023\/10\/30\/executive-order-on-the-safe-secure-and-trustworthy-development-and-use-of-artificial-intelligence\/\">Executive Order on Artificial Intelligence<\/a>, which emphasized safety over progress. That same year, the National Institute of Standards and Technology (NIST) \u2014 the US agency tasked with developing standards and guidelines in science and technology \u2014 released its <a href=\"https:\/\/www.nist.gov\/itl\/ai-risk-management-framework\">AI risk management framework<\/a>.&nbsp;<\/p>\n\n\n\n<p>Many of those early initiatives have since fallen apart. They ran into a fundamental problem: measuring and enforcing compliance. There are no agreed-upon technical thresholds and no major oversight committees to hold developers accountable. They set boundaries that sounded good \u2014 10<sup>26<\/sup> FLOPs thresholds \u2014 that we\u2019ve since zoomed by. Many of the policies tried to answer incredibly complex questions, essentially attempting to encode centuries of legal and ethical precedent into software. That\u2019s slow, messy work, and the would-be enforcers of AI rules \u2014 the digital Teamsters \u2014 didn\u2019t succeed.<\/p>\n\n\n\n<p>In 2025, the second Trump administration accelerated the demise of this safety-first approach. Once in office, President Trump quickly rescinded Biden-era AI directives and issued <a href=\"https:\/\/www.federalregister.gov\/documents\/2025\/01\/31\/2025-02172\/removing-barriers-to-american-leadership-in-artificial-intelligence\">Executive Order 14179<\/a>, which emphasized innovation and competitiveness, taking the guardrails off AI developers.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-border-control\">Border control<\/h3>\n\n\n\n<p>Looming over the debate of how to regulate AI models has been the spectre of the best ones ending up in the hands of America\u2019s biggest geopolitical foe, China.<\/p>\n\n\n\n<p>To make frontier AI models, you need three things: engineering talent, energy, and semiconductor chips. Since 2018, the US has treated control of advanced AI chips as a national\u2011security issue and has used regulations \u2014 and political relationships \u2014 to ensure they stay out of China\u2019s hands whenever possible:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In 2018, the US made advanced AI chips a national security issue by <a href=\"https:\/\/www.congress.gov\/bill\/115th-congress\/house-bill\/5040\">passing<\/a> the Export Control Reform Act (ECRA), the first permanent statutory export control authority since the Cold War.<\/li>\n\n\n\n<li>In October 2022, the Biden administration <a href=\"https:\/\/www.bis.doc.gov\/index.php\/documents\/about-bis\/newsroom\/press-releases\/3158-2022-10-07-bis-press-release-advanced-computing-and-semiconductor-manufacturing-controls-final\/file\">banned<\/a> exports of high\u2011performance GPUs and some chip\u2011making tools to China.\u00a0<\/li>\n\n\n\n<li>In January 2023, Washington <a href=\"https:\/\/www.nytimes.com\/2023\/01\/28\/business\/economy\/netherlands-japan-china-chips.html\">convinced<\/a> the Netherlands and Japan to halt the sale of equipment used to manufacture semiconductors to China.\u00a0<\/li>\n\n\n\n<li>In December 2024, the Bureau of Industry and Security <a href=\"https:\/\/media.bis.gov\/sites\/default\/files\/documents\/FINAL%20DOC%20Nat%20Sec%20Action%20Rls%20Dec%202%2024.pdf\">expanded<\/a> export controls to cover high\u2011bandwidth memory chips and more manufacturing equipment, forcing Samsung and Micron to obtain licenses to ship to China.<\/li>\n\n\n\n<li>In January 2025, the outgoing Biden administration issued the <a href=\"https:\/\/www.rand.org\/pubs\/perspectives\/PEA3776-1.html\">AI Diffusion Framework<\/a>. It would have required licenses for exports of high\u2011end chips, and even model weights, to most of the world, creating a tiered system that essentially banned shipments to China, but it was rescinded by the Trump administration.<\/li>\n<\/ul>\n\n\n\n<p>\u201cWe are protecting our technologies with a &#8216;small yard, high fence&#8217; approach,\u201d Jake Sullivan, former National Security Advisor, said <a href=\"https:\/\/foreigninvestmentwatch.com\/u-s-implementing-small-yard-high-fence-on-critical-tech\/\">many times<\/a>, providing an analogy for the US\u2019s plan to tightly control a small number of highly valuable hardware components.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-pullquote\"><blockquote><p>The nature of the chip war is about to change.<\/p><\/blockquote><\/figure>\n\n\n\n<p>Did it work? Partially. Chinese-made chips, such as Huawei\u2019s Ascend 910B\/C, are said to be roughly four years behind Nvidia\u2019s leading chips, but that gap might not exist for long \u2014 Kai-Fu Lee, founder of China-based AI company <a href=\"http:\/\/01.ai\">01.AI<\/a>, <a href=\"https:\/\/www.reuters.com\/technology\/artificial-intelligence\/deepseek-narrows-china-us-ai-gap-three-months-01ai-founder-lee-kai-fu-says-2025-03-25\/\">told Reuters<\/a> that Chinese models were just three months behind US models as of March 2025.&nbsp;<\/p>\n\n\n\n<p>More importantly, China is starting to learn to work around the regulatory hurdles through upskilling, domestic manufacturing, and maybe even subterfuge \u2014 during the <a href=\"https:\/\/www.freethink.com\/artificial-intelligence\/deepseek-ai-race\">DeepSeek saga<\/a>, there were persistent rumors that China was getting its hands on restricted Nvidia chips via intermediaries in Singapore and elsewhere.<\/p>\n\n\n\n<p>The nature of the chip war is also about to change, and the nature of this change could shift the race in China\u2019s favor. As AI adoption grows, the number of chips used to run the models \u2014 a process called inference \u2014 will soon outnumber the number used to train them. Unlike training, inference often can rely on older or less specialized chips, a market where China\u2019s domestic production could provide substantial cost and reach advantages.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-sovereign-ai\">Sovereign AI<\/h3>\n\n\n\n<p>The US has been able to maintain a lead in the race to AGI so far, but China is very close behind. If you exclude the very top models from OpenAI and Anthropic, Chinese models \u2014 Qwen, DeepSeek, Kimi, GLM, etc. \u2014 are highly comparable, and new ones emerge almost every day. Almost all of them are open source.<\/p>\n\n\n\n<p>As America\u2019s lead narrows, the stakes in the race are getting higher. What used to sound like hyperbole \u2014 \u201cAI will take everyone\u2019s jobs\u201d \u2014 is starting to sound at least partly plausible. And with AGI \u2014 however you define it \u2014 approaching, we\u2019re now seeing $1 billion <a href=\"https:\/\/www.freethink.com\/artificial-intelligence\/ai-talent-war\">pay packages for engineers<\/a>, $100 billion investments into capex, and $1 trillion valuations for tech companies. These figures are too high to ignore \u2014 the US economy <em>is<\/em> going to be dramatically affected by AI.<\/p>\n\n\n\n<p>Software-based AI regulations were designed to give the US government control over the speed of AI development. That proved impossible, and now the guardrails are off. Hardware-based regulations were designed to ensure only \u201cwe\u201d could use AI, not \u201cthem.\u201d Though partially successful, that lead is evaporating.&nbsp;<\/p>\n\n\n\n<p>That leaves the US facing the inevitable: The most powerful technology the world has ever seen \u2014 one that could replace a big chunk of the $100 trillion of spend that goes to labor every year \u2014 will likely soon be available to the US <em>and<\/em> the rest of the world\u2019s most powerful nations.&nbsp;<\/p>\n\n\n\n<p>This is going to dramatically change the makeup of society and the global power dynamic.&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote\">\n<p>The US has stumbled before in regulating transformative technologies, and this is the most powerful one yet.<\/p>\n<\/blockquote>\n\n\n\n<p>The key question of governance of AI is essentially a question of how to handle this new concentrated power. As American historian and philosopher Hannah Arendt argued, new technology always radically alters human affairs, and the government\u2019s role is to preserve plurality and constrain the domination that gets enabled.&nbsp;<\/p>\n\n\n\n<p>And this is hard. Like we saw, simple software regulations don\u2019t quite work or make sense. Constraining hardware can work but requires becoming far more draconian than we would like to be. It also only works for geopolitical domination. Removing AI entirely isn\u2019t really an option to keep global competitiveness. That\u2019s why it\u2019s complicated. To come to grips with it means answering questions like:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>How sovereign should AI be? Is it like the cloud, data storage, networking equipment, power plants, solar panels? What\u2019s the analogy?<\/li>\n\n\n\n<li>How much should a model\u2019s creator get indemnity for what the model does?\u00a0<\/li>\n\n\n\n<li>How would that apply to the creators of open-source models?\u00a0<\/li>\n\n\n\n<li>Should the US have federal AI laws? If so, what should they include and how should they be enforced?\u00a0<\/li>\n\n\n\n<li>What would be the benefits of letting the free market sort it out? When\u2019s even the right time to get involved?<\/li>\n<\/ul>\n\n\n\n<p>The US has stumbled before in regulating transformative technologies \u2014 from encryption to social media \u2014 and this is the most powerful one yet, with the potential to redefine work, wealth, and global influence. The real challenge now is whether the US can govern this power appropriately \u2014 in a way that protects society, preserves America\u2019s competitive edge, and fosters innovation, all at the same time.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US must regulate AI in a way that protects society, preserves America\u2019s competitive edge, and fosters innovation \u2014 all at the same time.<\/p>\n","protected":false},"author":25,"featured_media":116563,"template":"","ftm_taxonomy_fields":[46,2202],"ftm_taxonomy_challenges":[],"ftm_taxonomy_statuses":[36],"ftm_taxonomy_hidden_tags":[2184],"class_list":["post-116560","ftm_article","type-ftm_article","status-publish","has-post-thumbnail","hentry","ftm_taxonomy_fields-ai","ftm_taxonomy_fields-opinion","ftm_taxonomy_statuses-featured"],"acf":[],"apple_news_notices":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v26.9) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Governing AGI: Model laws, chip wars, and sovereign AI<\/title>\n<meta name=\"description\" content=\"The US must regulate AI in a way that protects society, preserves America\u2019s competitive edge, and fosters innovation \u2014 all at the same time.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.freethink.com\/artificial-intelligence\/governing-agi\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Governing AGI: Model laws, chip wars, and sovereign AI\" \/>\n<meta property=\"og:description\" content=\"The US must regulate AI in a way that protects society, preserves America\u2019s competitive edge, and fosters innovation \u2014 all at the same time.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.freethink.com\/artificial-intelligence\/governing-agi\" \/>\n<meta property=\"og:site_name\" content=\"Freethink\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.freethink.com\/wp-content\/uploads\/2025\/08\/governing-AGI_thumb.jpg?resize=1200,630\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:description\" content=\"The US has stumbled in regulating past technologies. 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