Trump Administration Abruptly Postpones Signing AI Executive Order to Maintain Tech Hegemony Over China: Strategy to Accelerate Innovation Through Deregulation

On May 21, 2026, the White House abruptly halted the signing of the long-awaited AI executive order, prioritizing global leadership over safety oversight for artificial intelligence (AI). President Trump expressed concerns that requiring pre-deployment reviews for frontier models could hold back the U.S. tech sector. This is interpreted as a commitment not to slow down the pace of innovation for American companies at a time when the technological arms race with China is intensifying.

President Trump postponed the order, judging that some of the proposed regulations risked slowing down the U.S. AI industry amid intensifying competition with China.

This decision is being evaluated as a strategic pause to maintain a technological advantage. The administration plans to re-examine specific provisions to ensure that the introduction of regulations does not impede the speed of innovation, and is expected to revise policies in a direction that maximizes private sector autonomy, particularly in AI development fields directly linked to national security.

Frontier Model Regulation and the NIST Bottleneck

One of the core issues of the proposed executive order was the mandatory pre-deployment review of frontier AI models by the National Institute of Standards and Technology (NIST). Critics have argued that such a review process would cause NIST's workload to explode and delay companies' product launch cycles. The White House is reportedly currently "reviewing" the security executive order.

• Requirement for rigorous safety testing and pre-reporting for frontier models
• Concerns over approval process delays due to NIST's lack of review capacity
• Possibility of excessive government intervention hindering private sector technological innovation

From a geopolitical perspective, the United States is focused on maintaining its lead over China. As of 2024, private AI investment in the U.S. reached approximately $109.1 billion, representing an overwhelming 12-to-1 ratio compared to China's $9.3 billion. While China's AI funding decreased by 38% year-over-year, the U.S. has further widened the gap.

In particular, investment in the generative AI sector reached $33.9 billion in 2024, surging more than 8.5 times compared to 2022. The Trump administration believes that this capital superiority directly translates into technological superiority and is adhering to a strategy of further widening the gap with China by leveraging market dynamics rather than regulation.

This delay is an extension of the deregulation stance pursued by the Trump administration. Executive Order 14365, announced in April 2026, established a process to check state-level AI regulations and strengthen federal authority. In fact, the case where the implementation date of the Colorado AI bill was postponed from February 1, 2026, to June 30, 2026, supports the federal government's willingness to intervene.

The White House Council of Economic Advisers (CEA) analyzed in an April 2026 report that deregulation efforts would provide significant benefits not only to the AI sector but also to the economy as a whole. By lowering regulatory barriers, the administration expects the U.S. to solidify its position as a hub for AI innovation and generate substantial economic benefits through this.

The market is reacting sensitively to this policy uncertainty. Billionaire investor Mark Cuban recently expressed disappointment, stating that Bitcoin failed to serve as a hedge amidst geopolitical instability, and sold his assets. This suggests that changes in the regulatory environment are becoming a factor that increases volatility in asset markets.

In the future, the White House is expected to release a revised framework reflecting industry feedback. The key point to watch is whether the pre-deployment review clause will be completely removed or if a compromise between national security and industrial competitiveness will be established. The Trump administration's "hands-off" approach, aimed at winning the "speed war" with China, is expected to continue for the time being.