The world’s best known artificial intelligence accelerationists have been in Silicon Valley. Now there’s one sitting in the White House.

President Donald Trump’s AI Action Plan, launched on Wednesday, represents a great loosening of rules around the ChatGPT boom. It’s an ambitious screed aimed at keeping America ahead in the race for AI supremacy. “China” is named only twice in the 23-page document, but it may as well have been in the title. The Donald Trump administration is also making a highly optimistic bet that it can stay ahead by continuing to sell advanced chips to the country.

You wouldn’t get that impression from the plan itself, which makes a full-throated pledge to deny “our foreign adversaries” access to Silicon Valley’s computing expertise. But Trump’s actions tell a different story. Earlier this month, he reversed an April 2025 ban on Nvidia’s shipments of AI chips to China. It was a stunning U-turn for a president who promised to crack down on the world’s second-biggest economy.

Nvidia’s leather-jacket clad chief executive, Jensen Huang, can take credit for the about-face. He’d lobbied the White House in recent months to lift its restrictions on his company’s chips to China — curbs that would have cost Nvidia US$15-billion in revenue, according to the company’s own estimates. Huang argued that banning exports of its H20 chips would hurt the president’s America First ambitions.

His logic, taken up by White House AI tsar David Sacks and commerce secretary Howard Lutnick, was that the best way to improve America’s economic interests was to allow its tech to proliferate around the world as quickly as possible. The theory mirrors a worldview that has long underpinned Silicon Valley businesses, that the more people use your product, the more “locked in” they become to your “ecosystem”, whether that’s Apple’s mobile platforms or Microsoft’s cloud services.

AI Action Plan

If Nvidia didn’t sell to China, Huang and Sacks argued, someone like Huawei would, driving revenue for Chinese companies that would be ploughed back into their own research and development, which they’d then sell to other nations. The rise of Chinese AI model DeepSeek offered a perfect example, when it launched an AI model in January that was as good as ChatGPT for a fraction of the cost. If constraint bred innovation, maybe we needed to loosen the constraints.

That is precisely what the White House did in mid-July, telling Nvidia, which controls more than 80% of the global market for AI chips, that it could resume selling its H20 chips to China. The White House maintains that Nvidia still restricts its most powerful chips, though that distinction is debatable: Nvidia’s export-approved product can still perform relatively well on key AI tasks.

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Trump’s AI Action Plan has a few other contradictions that point to who its real winners are. It pledges rigorous AI safety controls, despite the fact that Trump cut oversight on the most powerful AI models in January. The plan promises to safeguard American national security and consumer welfare, but it also directs agencies like the Federal Trade Commission to roll back Joe Biden-era consumer protections.

The plan promotes open-source and open-weight models as key to national competitiveness, but Washington is a voice in the wind on a trend largely driven by companies and market pressures. Open-source AI helped China innovate quickly enough to nearly close the gap with the US on model capabilities, but Mark Zuckerberg is moving away from building more open systems as they become more advanced.

Above all, Trump’s AI plan shows the extent to which Silicon Valley is now able to steer the White House agenda. The administration’s China hawks are being sidelined, and so, too, is the faction of wealthy technologists, so-called AI doomers, who’d pushed for stronger safety controls.

The unintended consequences of Trump’s aggressive AI plans could also take years to play out. We might find ourselves and our kids addicted to artificial companions, or China might use Nvidia’s chips to innovate its way past the US. One thing is for sure: whatever the result of Trump’s strategic gamble, Silicon Valley’s leaders will reap the financial rewards. — (c) 2025 Bloomberg LP

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