Trump's Fractured AI Team Races to Keep US Ahead of China

As Chinese AI builders develop more capable open-source models, the Trump administration faces a critical decision: how tightly should it restrict access to these technologies? The problem is that no one inside the government can quite agree on the answer.

Officials across Commerce, the Treasury, and the White House itself are pulling in different directions. One senior White House official summed up the chaos: "It's not an argument with two sides, it's an argument with ten sides." Without clear interagency coordination, real power will flow to those who have the president's ear.

The Competing Camps#

Howard Lutnick, Commerce Secretary, controls export rules and has quietly explored ways to incentivize American AI labs to release their own open-source models as a counterbalance to China. He's struck a balance—imposing restrictions on some firms while remaining more permissive than hawks elsewhere in the administration. Last week, Lutnick dismissed concerns about a Chinese model's capabilities, arguing it underperformed US alternatives on key tests.

Sean Cairncross, the National Cyber Director, has adopted a harder line. A former Republican campaign lawyer with no AI background, he nonetheless shapes national security strategy around the technology. He and his chief of staff, Lara Smith, are particularly focused on preventing Chinese firms from using a technique called "distillation"—copying knowledge from leading US models to train their own. Cairncross helped draft the president's June 2 executive order establishing a framework for assessing the most powerful AI systems.

Scott Bessent, Treasury Secretary, has taken perhaps the most aggressive stance. He's labeled the distillation practice "IP theft" and threatened sanctions or blacklisting of Chinese labs. His rising involvement reflects preparation for Xi Jinping's visit to the White House and an APEC summit later this year. Unlike Lutnick's measured approach, Bessent is pushing for faster development of Western open-source models to avoid losing the AI race entirely.

David Sacks, who stepped down as the administration's AI czar in March, remains unusually influential despite his departure. Using his 1.6 million X followers, the tech investor has consistently advocated for a hands-off regulatory stance. He successfully watered down provisions in the June 2 executive order and continues to publicly counter what he calls "Kimi Panic" over Chinese advances—arguing that American models still maintain a significant lead.

Who Really Decides?#

Susie Wiles, Trump's chief of staff, functions as the ultimate arbiter. The Treasury, Commerce Department, and other officials route their positions through her office before reaching the Oval Office. Her approval has repeatedly proven decisive, and Wiles is now vetting competing proposals with no clear preference yet visible.