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Trump’s AI agenda hands Silicon Valley the win—while ethics, safety, and ‘woke AI’ get left behind

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Yesterday, I recapped my day at “Winning the AI Race”—an event hosted by the All-In podcast and the Hill & Valley coalition—where Silicon Valley’s elite descended on Washington’s stately Andrew Mellon Auditorium to celebrate President Trump’s new AI Action Plan, which he signed onstage after a surreal afternoon that fused podcast spectacle with public policy. The only non–Silicon Valley touch seemed to be the sea of suits that replaced the typical tech uniform of hoodies and sneakers (though Nvidia CEO Jensen Huang refused to budge from his usual leather jacket and black jeans).

Trump’s speech before scrawling his signature went on so long that I missed my Amtrak train back to New Jersey. While I waited for the next one, I had plenty of time to reflect on the day—which, without question, was a victory lap for the so-called AI “accelerationists,” now led in Washington by David Sacks, Trump’s appointed AI and crypto czar and co-host of the All-In podcast.

Pushing Silicon Valley’s pro-speed, pro-scale ideology

Sacks—along with senior White House AI policy advisor Sriram Krishnan and Office of Science and Technology Policy director Michael Kratsios, both of whom were also present at the event—has been front and center pushing Silicon Valley’s pro-speed, pro-scale ideology, advocating for rapid deployment and minimal regulation of AI.

For the “accelerationists”—those who believe the rapid development and deployment of artificial intelligence should be pursued as quickly as possible—innovation, scale, and speed are everything. Over-caution and regulation? Ill-conceived barriers that will actually cause more harm than good. They argue that faster progress will unlock massive economic growth, scientific breakthroughs, and national advantage. And if superintelligence is inevitable, they say, the U.S. had better get there first—before rivals like China’s authoritarian regime.

AI ethics and safety has been sidelined

This worldview, articulated by Marc Andreessen in his 2023 blog post, has now almost entirely displaced the diverse coalition of people who worked on AI ethics and safety during the Biden Administration—from mainstream policy experts focused on algorithmic fairness and accountability, to the safety researchers in Silicon Valley who warn of existential risks. While they often disagreed on priorities and tone, both camps shared the belief that AI needed thoughtful guardrails. Today, they find themselves largely out of step with an agenda that prizes speed, deregulation, and dominance.

Whether these groups can claw their way back to the table is still an open question. The mainstream ethics folks—with roots in civil rights, privacy, and democratic governance—may still have influence at the margins, or through international efforts. The existential risk researchers, once tightly linked to labs like OpenAI and Anthropic, still hold sway in academic and philanthropic circles. But in today’s environment—where speed, scale, and geopolitical muscle set the tone—both camps face an uphill climb. If they’re going to make a comeback, I get the feeling it won’t be through philosophical arguments. More likely, it would be because something goes wrong—and the public pushes back.

Also: I hope you’ll check out my first-ever Fortune cover story –a deep dive into Meta’s superintelligence spending spree, with a massive bet by Mark Zuckerberg on new chief AI officer and Scale AI founder Alexandr Wang. Also, don’t miss the marvelous feature from Jeremy Kahn about how Aravind Srinivas turned Perplexity into an $18 billion would-be Google killer. All part of our upcoming Most Powerful People issue!

With that, here’s the rest of the AI news.

Sharon Goldman
sharon.goldman@fortune.com
@sharongoldman

Fortune recently unveiled a new ongoing series, Fortune AIQ, dedicated to navigating AI’s real-world impact. Our third collection of stories explores how businesses across virtually every industry are putting AI to work—and how their particular field is changing as a result.

  • How Walmart, Amazon, and other retail giants are using AI to reinvent the supply chain—from warehouse to checkout. Read more
  • Meet the legacy players and upstarts using AI to reinvent the energy business. Read more
  • AI isn’t just entering law offices—it’s challenging the entire legal playbook. Read more
  • How a bulldozer, crane, and excavator rental company is using AI to save 3,000 hours per week. Read more
  • AI is already touching nearly every corner of the medical field. Read more

AI IN THE NEWS

Nvidia AI chips worth $1B smuggled to China after Trump export controls. According to a Financial Times investigation, more than $1 billion worth of Nvidia’s advanced AI chips—including the banned B200—flooded into China over a three-month period through a thriving black market, despite tightened U.S. export controls under Trump. The Financial Times uncovered a network of Chinese distributors reselling the chips—often in ready-made server racks—from U.S. suppliers like Supermicro, with no indication those companies were aware of the diversion. Although it’s legal to receive restricted chips in China, the sellers and shippers are violating U.S. rules. The workaround includes using Southeast Asian countries and secondary suppliers to funnel in high-end hardware, showing how U.S. controls may be generating inefficiency and profits for middlemen, rather than stopping China’s AI ambitions. In a response to CNBC, Nvidia said that datacenters built with smuggled chips are a “losing proposition” and that it does not support unauthorized products.

Elon Musk says he is bringing back video-sharing app Vine in AI form. Elon Musk announced on X that the social network would revive the beloved short-form video app Vine “in AI form,” nearly nine years after it was shut down. While details remain scarce, the move aligns with Musk’s long-teased interest in bringing Vine back—and could position the platform to capitalize on the rise of AI-generated content, which currently excels at short-form formats like Vine’s original six-second clips.

Walmart is overhauling its approach to AI agents. Walmart is streamlining its sprawling AI agent strategy, consolidating dozens of independently built tools into four unified “super agents,” according to the Wall Street Journal. Each will serve a core group—customers, employees, engineers, or suppliers—by bundling multiple behind-the-scenes agents into a single, simplified interface. The shift comes after growing internal complexity led to a fragmented user experience. “It became very clear that we could dramatically simplify,” said CTO Suresh Kumar, noting that the change reflects both widespread adoption of AI at Walmart and strong executive backing.

FORTUNE ON AI

Exclusive: Who covers the damage when an AI agent goes rogue? This startup has an insurance policy for that – by Sharon Goldman

Google’s AI Overviews are cutting off the oxygen to the web – by Beatrice Nolan

Elon Musk says Tesla will start adding vehicles it doesn’t directly own into its robotaxi network next year – by Jessica Mathews

How Walmart, Amazon, and other retail giants are using AI to reinvent the supply chain—from warehouse to checkout – by Sharon Goldman

Meet the companies using AI to reinvent the energy business – by Alexandra Sternlicht

AI CALENDAR

July 26-28: World Artificial Intelligence Conference (WAIC), Shanghai. 

Sept. 8-10: Fortune Brainstorm Tech, Park City, Utah. Apply to attend here.

Oct. 6-10: World AI Week, Amsterdam

Oct. 21-22: TedAI San Francisco.

Dec. 2-7: NeurIPS, San Diego

Dec. 8-9: Fortune Brainstorm AI San Francisco. Apply to attend here.

EYE ON AI NUMBERS

88%

That’s how many Gen Z study participants said they were confident in detecting AI-generated content, according to a new study by from Socialtrait, an AI-powered consumer insights platform. Eighty-four percent of millennials said the same. But even tech-savvy participants admitted their real success rates are actually often closer to 40%.

The study authors said that this gap—that is, Americans significantly overestimate their ability to detect AI-generated misinformation—is likely to make people more vulnerable to digital manipulation. Yet, younger Americans, despite being the most confident and digitally engaged, are also the most frequent sharers of AI-generated content. Eighty-seven percent of millennials and 80% of Gen Z respondents reported sharing AI-created material.



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Elon Musk’s X fined $140 million by EU for breaching digital regulations

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European Union regulators on Friday fined X, Elon Musk’s social media platform, 120 million euros ($140 million) for breaches of the bloc’s digital regulations, in a move that risks rekindling tensions with Washington over free speech.

The European Commission issued its decision following an investigation it opened two years ago into X under the 27-nation bloc’s Digital Services Act, also known as the DSA.

It’s the first time that the EU has issued a so-called non-compliance decision since rolling out the DSA. The sweeping rulebook requires platforms to take more responsibility for protecting European users and cleaning up harmful or illegal content and products on their sites, under threat of hefty fines.

The Commission, the bloc’s executive arm, said it was punishing X because of three different breaches of the DSA’s transparency requirements. The decision could rile President Donald Trump, whose administration has lashed out at digital regulations, complained that Brussels was targeting U.S. tech companies and vowed to retaliate.

U.S. Secretary of State Marco Rubio posted on his X account that the Commission’s fine was akin to an attack on the American people. Musk later agreed with Rubio’s sentiment.

“The European Commission’s $140 million fine isn’t just an attack on @X, it’s an attack on all American tech platforms and the American people by foreign governments,” Rubio wrote. “The days of censoring Americans online are over.”

Vice President JD Vance, posting on X ahead of the decision, accused the Commission of seeking to fine X “for not engaging in censorship.”

“The EU should be supporting free speech not attacking American companies over garbage,” he wrote.

Officials denied the rules were intended to muzzle Big Tech companies. The Commission is “not targeting anyone, not targeting any company, not targeting any jurisdictions based on their color or their country of origin,” spokesman Thomas Regnier told a regular briefing in Brussels. “Absolutely not. This is based on a process, democratic process.”

X did not respond immediately to an email request for comment.

EU regulators had already outlined their accusations in mid-2024 when they released preliminary findings of their investigation into X.

Regulators said X’s blue checkmarks broke the rules because on “deceptive design practices” and could expose users to scams and manipulation.

Before Musk acquired X, when it was previously known as Twitter, the checkmarks mirrored verification badges common on social media and were largely reserved for celebrities, politicians and other influential accounts, such as Beyonce, Pope Francis, writer Neil Gaiman and rapper Lil Nas X.

After he bought it in 2022, the site started issuing the badges to anyone who wanted to pay $8 per month.

That means X does not meaningfully verify who’s behind the account, “making it difficult for users to judge the authenticity of accounts and content they engage with,” the Commission said in its announcement.

X also fell short of the transparency requirements for its ad database, regulators said.

Platforms in the EU are required to provide a database of all the digital advertisements they have carried, with details such as who paid for them and the intended audience, to help researches detect scams, fake ads and coordinated influence campaigns. But X’s database, the Commission said, is undermined by design features and access barriers such as “excessive delays in processing.”

Regulators also said X also puts up “unnecessary barriers” for researchers trying to access public data, which stymies research into systemic risks that European users face.

“Deceiving users with blue checkmarks, obscuring information on ads and shutting out researchers have no place online in the EU. The DSA protects users,” Henna Virkkunen, the EU’s executive vice-president for tech sovereignty, security and democracy, said in a prepared statement.

The Commission also wrapped up a separate DSA case Friday involving TikTok’s ad database after the video-sharing platform promised to make changes to ensure full transparency.

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AP Writer Lorne Cook in Brussels contributed to this report.



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Nvidia CEO says U.S. data centers take 3 years, but China ‘can build a hospital in a weekend’

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Nvidia CEO Jensen Huang said China has an AI infrastructure advantage over the U.S., namely in construction and energy.

While the U.S. retains an edge on AI chips, he warned China can build large projects at staggering speeds.

“If you want to build a data center here in the United States from breaking ground to standing up a AI supercomputer is probably about three years,” Huang told Center for Strategic and International Studies President John Hamre in late November. “They can build a hospital in a weekend.”

The speed at which China can build infrastructure is just one of his concerns. He also worries about the countries’ comparative energy capacity to support the AI boom.

China has “twice as much energy as we have as a nation, and our economy is larger than theirs. Makes no sense to me,” Huang said.

He added that China’s energy capacity continues to grow “straight up”, while the U.S.’s remains relatively flat.

Still, Huang maintained that Nvidia is “generations ahead” of China on AI chip technology to support the demand for the tech and semiconductor manufacturing process.

But he warned against complacency on this front, adding that “anybody who thinks China can’t manufacture is missing a big idea.”

Yet Huang is hopeful about Nvidia’s future, noting President Donald Trump’s push to reshore manufacturing jobs and spur AI investments.

‘Insatiable AI demand’

Early last month, Huang made headlines by predicting China would win the AI race—a message he amended soon thereafter, saying the country was “nanoseconds behind America” in the race in a statement shared to his company’s X account.

Nvidia is just one of the big tech companies pouring billions of dollars into a data center buildout in the U.S., which experts tell Fortune could amount to over $100 billion in the next year alone.

Raul Martynek, the CEO of DataBank, a company that contracts with tech giants to construct data centers, said the average cost of a data center is $10 million to $15 million per megawatt (MW), and a typical data centers on the smaller side requires 40 MW.

“In the U.S., we think there will be 5 to 7 gigawatts brought online in the coming year to support this seemingly insatiable AI demand,” Martynek said.

This shakes out to $50 billion on the low end, and $105 billion on the high end.



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Trump finally meets Claudia Sheinbaum face to face at the FIFA World Cup draw

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Their long-delayed first face-to-face discussion focused on next year’s World Cup — and included side discussions about trade and tariffs — but immigration was not the top issue. That’s despite Trump’s push to crack down on the U.S.-Mexico border being a centerpiece of his administration, and the driving force in the relations between both countries.

Trump has been in office for more than 10 months, and his having taken so long to see Sheinbaum in-person is striking given that meeting with the leader of the country’s southern neighbor is often a top priority for U.S. presidents.

Trump and Sheinbaum had been set to meet in June on the sidelines of the Group of Seven summit in Canada, but that was scrapped after Trump rushed back to Washington early amid rising tensions between Israel and Iran.

Soccer took center stage — but tariffs still loom large

Trump and Sheinbaum sat talking in the president’s box and also appeared onstage with Canadian Prime Minister Mark Carney at the Kennedy Center for Friday’s 2026 World Cup draw. The U.S., Mexico and Canada are co-hosting the tournament, which begins in June.

A senior White House official, who spoke on the condition of anonymity to discuss private meetings, said Trump, Sheinbaum and Carney met privately after participating in the draw.

Sheinbaum had said before leaving Mexico that she’d talk to Trump about tariffs that his administration has imposed on automobiles, steel and aluminum from Mexico, among other things. She said after appearing at the Kennedy Center that the three leaders “talked about the great opportunity that the 2026 FIFA World Cup represents for the three countries and about the good relationship we have.”

“We agreed to continue working together on trade issues with our teams,” Sheinbaum posted on X.

Mexico is the United States’ largest trading partner. The the U.S.-Mexico-Canada Agreement which Trump forged in his first term as a replacement for 1994’s North American Free Trade Agreement also remains in place. But U.S. Trade Representative Jamieson Greer has begun scrutinizing it ahead of a joint review process set for July.

In the meantime, the U.S. and Mexico’s priorities have been reshaped by the steep drop in the number of people crossing into the U.S. illegally along its southern border, as well as the White House’s — so far largely unrealized — threats to impose large trade tariffs on its neighbor.

Before speaking in-person, Trump and Sheinbaum had repeatedly talked by phone, discussing tariffs and Mexican efforts to help combat the trafficking of fentanyl into the U.S. But despite other world leaders, including Russian President Vladimir Putin and Chinese President Xi Jinping, having already met with Trump this term, the meeting with Sheinbaum hadn’t happened until Friday.

The Trump whisperer?

Waiting so long to meet in person hasn’t seemed to hurt Mexico’s president’s standing with Trump.

The two spoke by phone in November 2024, with the then-U.S. president-elect declaring afterward that they’d agreed “to stop Migration through Mexico” — even as Sheinbaum suggested her country had already been doing enough.

Trump soon after taking office threatened to impose a 25% tariff on goods imported from Mexico in an effort to force that country to better combat fentanyl smuggling, only to later agree to a pause.

The White House subsequently backed off tariff threats against most Mexican goods. Then, in October, Sheinbaum announced that the U.S. had given her country another extension to avoid sweeping 25% tariffs on goods it imports to the U.S. — even as many items covered by the USMCA trade deal remain exempt.

Mexico, though, hasn’t avoided all U.S. tariffs. Sheinbaum’s country continues to try to negotiate its way out of import levies Trump has imposed worth 25% on the automotive sector and 50% on steel and aluminum.

Sheinbaum’s success at mitigating many tariffs, and other successes in the bilateral relationship, has led some to wonder if she has a special gift for getting what she wants from him.

She’s largely pulled it off by affording Trump the respect the U.S. president demands from leaders around the world — but especially a neighboring country — and by deploying occasional humor and pushing back, always respectfully, when necessary.

Sheinbaum also defused another potential point of contention, Trump’s renaming of the Gulf of Mexico to the “Gulf of America,” by proposing dryly that North America should be renamed “América Mexicana,” or “Mexican America.” That’s because a founding document dating from 1814 that preceded Mexico’s constitution referred to it that way.

Still, Mexican officials continue to work furiously to lessen the trade blow from tariffs going into 2026 — levies that could wreck its already low-growth economy, particularly in its all-important automotive sector. Sheinbaum’s government has also sought to defend its citizens living in the U.S. as the Trump administration expands its mass deportation operations.

Sheinbaum’s government also lobbied unsuccessfully against a 1% U.S. tax on remittances, or money transfers that millions of Mexicans send home every year from the United States. It was approved as part of Trump’s tax cut and spending package and takes effect Jan. 1.

Trump’s push for mass deportations

Trump has directed federal officials to prioritize major deportation pushes in Democratic-run cities — an extraordinary move that lays bare the politics of the issues. He’s also deployed the National Guard in an effort to curb crime, which has led to a spike in immigration-related arrests, in places like Los Angeles, Chicago and Washington, as well as Memphis, Tennessee, and Portland, Oregon.

The Trump administration says its priority is targeting “the worst of the worst” criminals, but most of the people detained in operations around the country have not had violent criminal histories.

Such operations often meant targeting Mexican citizens who have lived and worked in the United States for years and may face deportation to a homeland they no longer know well. It also has meant serious threats of declining remittance income, which has fallen for seven consecutive months.

The lower number of illegal U.S.-Mexico border crossings has knocked immigration off its perch as the top agenda item for the U.S.-Mexico bilateral relations for the first time in recent memory.

Mexican officials now say conversations around immigration have shifted toward cajoling countries into taking back their citizens and reintegrating them to keep them from leaving again — a major Trump administration priority around the world.

Cooperation on security

Sheinbaum has blunted some of the Trump administration’s tough talk on fentanyl and drug smuggling cartels by giving her security chief Omar García Harfuch more authority.

Mexico has also extradited dozens of drug cartel figures to the U.S., including Rafael Caro Quintero, long sought in the 1985 killing of a DEA agent. That show of goodwill, and a much more visible effort against the cartels’ fentanyl production, has gotten the Trump administration’s attention.

That’s a significant improvement. Only a few years ago, the DEA struggled to get visas for its people in Mexico, and then-President Andrés Manuel López Obrador accused the U.S. government of fabricating evidence against a former Mexican defense secretary, though he never presented evidence to back up the allegation.

Not everything has gone so smoothly, though. Trump criticized Sheinbaum for rejecting his proposal to send U.S. troops to Mexico to help thwart the illegal drug trade.

Last month, Sheinbaum said there was no way the U.S. military would be able to make strikes in Mexico, after Trump said he was open to the idea. And she has denounced U.S. strikes on boats allegedly carrying drugs in the Caribbean and eastern Pacific.

“The president of Mexico is a lovely woman, but she is so afraid of the cartels that she can’t even think straight,” Trump said earlier this year.

Sheinbaum declined to take the bait — and avoided turning up the political pressure — by sidestepping Trump’s criticism.

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Associated Press writer Chris Sherman contributed from Mexico City.



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