The start of the Trump administration has been characterized by an aggressive revamp of the federal government’s approach to artificial intelligence. During the first week, Trump published two executive orders focused on reversing Biden’s heavy-handed approach to AI. As the new admin looks into erasing other Biden-era mistakes, it should prioritize and reevaluate the recent AI export control rules drafted by the Department of Commerce’s Bureau of Industry and Security. This rulemaking will likely become a costly unforced error that most Americans will look back on with deep regret. These rules would enact stringent export controls for various AI-related goods and services for all, except for a handful of countries deemed “low-risk.” Additionally, AI companies would be required to file and process extensive paperwork when exporting products or services abroad, and they will be subject to export caps. These restrictions would apply to essentially every country in the world, except the United Kingdom, most of the European Union, South Korea, Taiwan, and Japan. The Biden administration argued that this new rule would prevent AI technology from falling into the wrong hands — namely, adversarial nations. But, this rule will seriously constrain the growth of American companies and the U.S. economy. Burdening the industry with onerous licensing regimes and capping its sales will severely limit companies’ ability to expand to other markets thus reducing their global reach and stifling their ability to grow. It will also likely end up going against its stated objective and empower the Chinese AI industry, which can take advantage of the reduced presence of American companies in global markets. Unsurprisingly, AI companies have already voiced their opposition to the rule. Their reasoning is simple: the added paperwork and trade restrictions will increase their prices and slow down the distribution of their products, making American AI products less competitive globally. However, the potential buyers for these products will still look for AI products on the global market, as they also want to reap the benefits of the AI revolution. Instead of sourcing American products, they will look to those of our adversaries who can satisfy their needs for a lower price in a timely matter. The consequences of ceding the global AI market to foreign adversaries go beyond monetary value. As witnessed with social media, leading firms and their countries will likely shape the rules — both formal and informal — of the industry. In the case of social media, America’s global leadership led to an internet culture that promoted democracy, free speech, and the rule of law. This happened because their products were willingly adopted by millions of users across the world, and shaped their behavior according to the rules that governed these platforms. A China-led AI global industry could undermine these past victories, with global repercussions. Another key shortcoming of the rule is that it rewards jurisdictions that are overregulating and unduly burdening American AI companies. The BIS’s criteria to exempt countries from most of these rules was to have a regulatory framework that “prevent[s] diversion of advanced technologies,” and to have a regulatory environment that “advances national security and foreign policy interests of the United States and its allies and partners.” Exempt From the Rules Nonetheless, the list of exempted countries is heavily populated by EU countries that passed the AI Act, a burdensome regulation that will primarily target American AI companies and could potentially undermine the development of the American AI industry. The burden of European regulation has been of such a magnitude, that several American companies abstain from providing their services in the region. However, the rulemaking rewards the European market with a lower regulatory burden, while punishing other commercial and foreign policy allies that have less hostile regulatory environments. Limiting the industry’s capacity to enter into new markets will reduce its potential revenues, causing this rulemaking to do little more than harm America’s claim for global leadership in AI. The Department of Commerce’s mission is to explore and adopt avenues to streamline commerce to ensure that American companies can enter as many markets as possible. However, this rulemaking does the complete opposite by adding paperwork and friction for U.S. exports. The administration should prioritize withdrawing this rule promptly before any more damage is done. Considering the role AI will take in the future economy, this rulemaking will likely become a costly unforced error that most Americans will look back on with deep regret. READ MORE: Making Friends: AI and Companionship AI Snake Oil: Separating Hype From Reality in Artificial Intelligence Juan Londoño is the Chief Regulatory Analyst at the Taxpayers Protection Alliance. The post Removing Export Rules on AI Should Be a Priority for the Trump Administration appeared first on The American Spectator | USA News and Politics.