Trump Allies Profit From AI boom as White House Pushes Back On New Guardrails
Artificial intelligence is generating fortunes almost as quickly as it is generating political arguments about how governments should control it.
For Donald Trump, the answer has increasingly been to let the industry move.
Shutterstock
His administration has pushed back against tighter federal restrictions, arguing that the US cannot afford to slow its AI companies while competing with China. At the same time, members of Trump’s family and some of the technology figures closest to his administration have acquired significant financial interests in businesses connected to the same expanding AI, datacentre and defense-technology economy.
The overlap does not establish that those investments are determining White House policy. But it has become increasingly difficult to separate the administration’s most consequential technology debate from the commercial interests of some of the people involved.
Donald Trump’s sons, through a series of AI-linked defense and technology investments, have become connected to companies that have secured a $620m Pentagon loan, a Marine Corps robotics contract and a $90m Air Force drone contract over the past year. His longtime friend Michael Dell’s company won a Pentagon contract worth as much as $9.7bn. A Washington Post analysis, meanwhile, found that companies linked to investment funds involving Donald Trump Jr. and Eric Trump had generated at least $3.2bn in direct federal business after the brothers invested in them, although the overwhelming majority of that total came from two established government contractors, SpaceX and Anduril.
And this week, as public and industry concern about artificial intelligence intensifies, the president again went to bat for rapid AI development.
“The only control or ‘guardrails’ that AI needs is a STRONG AND SMART (High IQ!) PRESIDENT, and the U.S.A. has that, in spades,” he posted on Truth Social. “There is a SICK conspiracy going on against AI and Data Centers.”
It was one of several strongly pro-AI messages from Trump as he pushed back against calls for tighter controls on the technology. His position has become increasingly explicit: Washington should be wary of imposing rules that might constrain the companies building the next generation of artificial intelligence.
The argument is rooted partly in geopolitical competition. Trump and members of his administration have repeatedly warned that slowing American AI development could hand an advantage to China, which is investing heavily in its own models, infrastructure and semiconductor industry. The administration has therefore framed rapid development not simply as a commercial priority, but as an issue of national power.
That position comes as his family’s business interests and those of several close allies increasingly intersect with the industries that could benefit from continued investment in AI infrastructure.
It is not clear that those financial relationships are driving Trump’s approach. His support for deregulation is consistent with a broader political argument his administration has made across several industries. But the parallel development of public policy and private investment has attracted scrutiny from Democratic lawmakers, government ethics specialists and others who argue that the connections deserve greater examination.
The argument over how much AI needs to be controlled
The administration presents its resistance to additional rules primarily as a question of competitiveness.
Trump and officials including David Sacks, who co-chairs the President’s Council of Advisors on Science and Technology, have repeatedly argued that excessive regulation could slow American companies at exactly the moment the US is racing China for dominance of what could become one of the defining technologies of the century.
The concern is easy to understand from a strategic perspective. The country that develops the most powerful AI systems first could gain advantages across industries ranging from medicine and manufacturing to cybersecurity and weapons development.
The disagreement is over how much risk governments should accept in trying to maintain that lead.
Sacks has dismissed some recent warnings about advanced AI as exaggerated and has argued that existing law can address many of the risks raised by the technology. Other influential technology executives have similarly cautioned against creating a large new regulatory system before governments fully understand what they are attempting to regulate.
Inside the administration itself, however, the debate has been more complicated.
Recent reporting has described disagreements between officials favouring stronger oversight and advisers who believe additional regulation could unnecessarily constrain American companies. The result has been an administration trying to reconcile two competing ideas: that advanced AI could create genuine national-security risks, and that slowing its development could itself become a national-security risk if China moves faster.
Those tensions have become harder to dismiss because some of the loudest warnings are now coming from the people building the technology.
In early September, Jacob Coxon, a researcher who said he had spent three years working on foundational AI training at OpenAI and Anthropic, resigned and issued a stark warning.
“Neither company is acting responsibly,” he wrote. “They are racing straight to self-improving superintelligence and gambling with our lives.”
He said some people working on the technology sincerely believe it “could kill us all by the end of the decade”.
The claim represents Coxon’s assessment rather than an established prediction about where AI is heading. Other prominent technology figures strongly disagree about the likelihood of such catastrophic outcomes. But his resignation became significant because it exposed the depth of concern among at least some researchers working directly on frontier models.
The broader disagreement inside AI is no longer simply between technology optimists and outside critics.
Executives and researchers from companies including OpenAI and Anthropic have themselves called for safeguards around increasingly capable systems, even while their companies continue to compete intensely to build them. That creates an unusual dynamic: some of the businesses with the strongest commercial incentives to advance AI are simultaneously among those warning governments that the technology may require oversight.
When theoretical risks become practical ones
The debate can sound abstract when it revolves around terms such as superintelligence or the possibility of machines eventually surpassing human capabilities.
Cybersecurity provides a more immediate example of what can change when sophisticated tools become easier to build.
This month, security researchers disclosed that artificial intelligence had assisted in developing a self-spreading exploit targeting WeChat. The vulnerability could be triggered through a call without the recipient answering, allowing a compromised account to spread the attack through trusted contacts.
Tencent, the Chinese technology company behind WeChat, patched the vulnerability before the researchers publicly disclosed the technical details, and there was no indication that users were compromised by the demonstration.
What attracted attention was the speed of development. Researchers said AI substantially shortened work that previously could have required a larger security team and a much longer development cycle.
That distinction lies at the centre of many current AI concerns.
Artificial intelligence does not necessarily create entirely new categories of malicious activity. Cyberattacks, fraud, disinformation and weapons development existed long before generative AI. The question is whether powerful models can dramatically reduce the expertise, manpower and time previously required to carry them out.
The same acceleration that makes AI commercially valuable is also what makes its potential misuse difficult to regulate.
Even JD Vance has publicly expressed unease about where some uses of the technology might lead. Speaking on a Christian podcast, he described some applications of AI as carrying “really, really weird spiritual dark energy” and said there are “things about the world” that leave him “not shocked if the Antichrist was walking among us”.
The rhetoric is dramatically different from Trump’s. Yet the administration’s policy continues to place substantial weight on keeping American development moving quickly.
For the public, the argument is becoming less abstract
The debate surrounding artificial intelligence is also shifting because the consequences of its infrastructure are becoming visible outside Silicon Valley.
AI requires enormous computing capacity. That means data centers, electricity infrastructure, cooling systems, semiconductor factories and the physical resources necessary to operate them.
For communities asked to host those facilities, questions about AI regulation can therefore become questions about electricity bills, water use, construction and land development.
On 16 September, the House voted 417-3 for legislation directing state utility regulators to consider making datacentres pay the full cost of additional electricity generation, transmission and distribution infrastructure required by their operations.
The overwhelming vote demonstrated how concerns about the physical cost of the AI boom have moved beyond technology-policy circles.
Nearly two-thirds of Americans are concerned about data centers pushing up energy costs, according to polling cited by the Associated Press, while 57% expressed concern about their impact on water supplies.
The political challenge is therefore becoming harder for either side to frame purely in terms of futuristic technology.
The benefits of AI may be enormous. Its costs are increasingly immediate.
The Trump family’s growing exposure to the AI economy
Those questions become more politically sensitive because of the Trump family’s expanding investments in businesses connected to AI and defense technology.
Donald Trump Jr. joined venture firm 1789 Capital after his father’s 2024 election victory. The firm has invested in companies connected to artificial intelligence and the infrastructure supporting it, including businesses involved in AI models, computing and defense technology.
Eric Trump, meanwhile, has invested through American Ventures, an arm of Dominari Holdings.
A month after Trump returned to the White House, his sons also launched an initiative called American Data Centers, intended to support the development of AI infrastructure. The business was subsequently merged into American Bitcoin, while related infrastructure companies have continued pursuing large-scale datacentre projects.
The Washington Post reported this weekend that the family’s business empire has become increasingly intertwined with the broader AI economy, while Trump has opposed calls to slow development.
That does not mean every investment depends on White House AI policy. Nor does the existence of an investment automatically create evidence of improper government action.
But the connections matter because decisions taken in Washington can influence the commercial environment in which those businesses operate.
Regulations affecting data centers, AI models, defense procurement, semiconductor production, critical minerals and autonomous systems can all shape the value of companies operating in those areas.
The closer private investments move towards industries directly affected by government decisions, the more scrutiny inevitably follows.
The $620m loan that drew particular attention
One of the clearest examples involves Vulcan Elements, a North Carolina company manufacturing rare-earth magnets used in technologies including defense systems, drones and datacentre equipment.
Around three months before the Pentagon announced plans to lend Vulcan $620m, 1789 Capital, the venture firm where Donald Trump Jr is a partner, acquired an undisclosed stake in the business.
A ProPublica investigation later reported that the request to provide financing to Vulcan originated with Peter Navarro, a senior White House adviser and friend of Trump Jr, rather than with the company or Pentagon officials.
According to ProPublica, defense officials were instructed to move at an unusually fast pace to complete the financing.
“The call came from the White House: We have to get this done,” one person involved in the process told the publication.
Trump Jr’s spokesman said he had no involvement in the transaction and did not discuss Vulcan with Navarro.
The Pentagon has similarly rejected suggestions that political connections influenced the award.
“No company receives preferential treatment,” a Pentagon spokesperson said in response to subsequent scrutiny. “Outside affiliations, investors, or political connections play absolutely no role in the Department’s funding decisions.”
1789 Capital has also said it did not influence the loan and did not know about it before it was announced publicly.
Those denials are important because the sequence of events alone does not establish that Trump Jr’s investment affected the Pentagon’s decision.
What ProPublica’s reporting did establish was that White House involvement played a role in initiating the financing process, adding to demands from Democratic lawmakers for further investigation.
Defense technology adds another layer
The Vulcan deal is part of a wider pattern of investment by the president’s sons in defense technology.
A Washington Post analysis identified 15 companies linked to investment vehicles involving Donald Trump Jr and Eric Trump that had generated at least $3.2bn in direct federal business since the brothers invested.
The headline figure requires context.
SpaceX and Anduril accounted for 97% of the direct government money included in the Post’s tally, and both were substantial government contractors independently of the Trump brothers.
Ten of the 15 companies already had federal business before the brothers invested in them, while eight held contracts during the Biden administration.
Excluding SpaceX and Anduril, however, the remaining companies still received about $103m in direct federal funding and nearly $1.8bn in long-term commitments after the investments.
That concentration of private investment in businesses dependent on government spending has become the central source of concern for lawmakers seeking additional oversight.
Democratic senators including Elizabeth Warren, Richard Blumenthal and Tammy Duckworth, together with representative Robert Garcia, asked the Pentagon’s inspector general last month to investigate contracts involving companies connected to the Trump brothers.
The request followed the Washington Post’s reporting on the portfolio.
The companies involved have said government business was won through normal procurement processes and on the strength of their technologies.
That leaves the political dispute centred not simply on whether rules were broken, but on whether the existing system provides enough transparency when close relatives of a sitting president invest heavily in companies seeking federal money.
Robots, drones and the merging of AI with defense
Eric Trump is separately connected to Foundation Future Industries, a robotics company developing machines with potential industrial and military uses. The company has received a $24m Pentagon contract.
Senator Elizabeth Warren has described the award as “corruption in plain sight”, a characterization disputed by those who reject claims that the family’s political connections determine contract awards.
Drone companies provide another example of why the dividing line between “AI investment” and “defense investment” is becoming less useful.
Modern autonomous systems increasingly depend on machine learning for navigation, targeting, data processing and decision support.
A drone manufacturer may therefore be a defense contractor, a robotics company and an AI company simultaneously.
That technological convergence means federal decisions about artificial intelligence increasingly touch industries far beyond the companies that produce chatbots.
The scrutiny also reaches Trump’s technology advisers
The potential conflicts under examination are not confined to the president’s family.
David Sacks has emerged as one of the administration’s most influential voices on AI.
He has consistently argued that the US should be cautious about creating new restrictions that could weaken American companies against Chinese competitors. Reporting on internal White House deliberations has described Sacks as an important advocate of the lighter-touch approach.
His private investment background has consequently attracted scrutiny.
That does not establish that his financial interests determine his policy positions. Sacks has long advocated a technology-friendly regulatory philosophy, and supporters of the administration’s approach argue that his industry experience is precisely what makes his advice valuable.
Critics see a different problem: government increasingly relies on people with extensive financial connections to the industries whose rules they are helping shape.
The debate became especially visible when the administration considered stronger oversight of frontier AI models. Reporting by the Wall Street Journal described Sacks and other technology figures as pushing against tougher proposals while other senior officials argued for additional controls.
It is a tension common to technology policy.
The people who understand an industry most deeply are often also the people most financially connected to it.
Silicon Valley itself is divided
The technology industry is not uniformly opposed to AI regulation.
That is one reason the current political debate is difficult to reduce to a simple conflict between government and business.
Executives and researchers at OpenAI and Anthropic have warned about potentially dangerous capabilities and supported forms of oversight. Other prominent technology leaders have argued that some of the more alarming predictions are overstated and that existing laws can handle many foreseeable harms.
The dispute therefore runs directly through Silicon Valley itself.
One group fears that governments could regulate too slowly and discover only after a major incident that existing safeguards were inadequate.
Another fears that governments could regulate too aggressively, slowing useful innovation, entrenching the largest incumbent companies and allowing China to move ahead.
Both arguments now sit behind the administration’s policy choices.
Trump has largely emphasised the second.
This weekend he announced plans for a new federal “AI Force”, comparing the initiative with the creation of Space Force and saying another AI czar would be appointed after Sacks’s departure from that role. The initiative is intended to support and monitor the development of AI without imposing the kind of heavy regulatory structure its critics are demanding.
AI is becoming a test of how Washington handles concentrated power
The issue running through these disputes is larger than any individual investment or contract.
Artificial intelligence is becoming one of the most capital-intensive industries in the world.
The companies building the largest models require extraordinary quantities of chips, energy and computing infrastructure. Defense departments increasingly want autonomous systems and AI-enabled weapons. Governments want domestic semiconductor manufacturing and secure supplies of critical minerals. Technology companies want rules loose enough to allow rapid experimentation.
The result is a dense network of government spending, private investment and policymaking.
That makes conflicts of interest particularly important to identify, but also particularly important to describe accurately.
A company receiving a Pentagon contract after an investor connected to the president takes a stake does not, by itself, prove favoritism.
A policymaker owning technology investments does not, by itself, demonstrate that those investments dictate government policy.
But when billions of dollars in private wealth and public spending move through the same emerging industry, transparency becomes increasingly consequential.
The question facing Washington is therefore not simply whether AI should be regulated.
It is also who gets to shape those rules, what financial interests they bring with them and how the government demonstrates that public policy is being made independently of private gain.
The pressure is unlikely to ease
That question will become harder as AI systems become more powerful and the infrastructure behind them becomes more visible.
The US and China are simultaneously competing for technological advantage and discussing ways to manage some shared AI risks. Treasury secretary Scott Bessent has proposed a mechanism through which the two countries could notify each other about AI incidents with national-security implications, illustrating the strange position both governments now occupy: rivals in a technological race that neither can entirely control alone.
At home, lawmakers are confronting everything from electricity prices and datacentres to cybersecurity, defense procurement and advanced-model safety.
Trump, meanwhile, remains resistant to broad new restrictions that he believes could slow American development.
His relatives continue investing in businesses positioned within the same technological transformation.
The administration says its approach is about maintaining US leadership. Critics want stronger safeguards and greater scrutiny of the financial relationships surrounding that policy.
Neither side is debating a distant technology anymore.
AI is already reshaping government spending, corporate valuations, electricity infrastructure, national security and private fortunes.
And the investments continue.
