David Sacks has warned that the US risks losing the global AI competition to China due to excessive negativity and overregulation around the technology. During a conversation with Salesforce CEO Marc Benioff at the World Economic Forum in Davos, the technology investor, who US President Donald Trump appointed as his AI and crypto czar, cautioned about a mentality that he calls the “AI doomer mindset“. This belief that unconstrained AI will harm humanity or cause societal collapse represents a “self-inflicted injury” for America. He expressed concern that a “fit of pessimism” could lead to overly restrictive policies, citing Senator Bernie Sanders’ recent call for a moratorium on data centre construction as an example.“If we have 1,200 different AI laws in the states, you know, clamping down on innovation, I worry that we could lose the AI race,” Sacks told Benioff. He pointed out that “we generally see that in Western countries, the AI optimism is a lot lower,” especially in the US, compared to other parts of the world, as indicated by the 2025 Edelman Trust Barometer.The debate highlights tensions between Silicon Valley leaders advocating for rapid AI development and policymakers calling for stronger safety measures, with Trump taking a deregulatory stance that his administration’s technology advisor argues is necessary to maintain American competitiveness against Chinese rivals.
Why David Sacks thinks US state regulations can affect AI development
Since taking office, Trump has supported a hands-off approach to AI development. In an AI Action Plan released last summer, the administration removed many rules governing AI research, a change from Biden-era policies that mandated federal oversight of AI governance. Trump went further in December with an executive order that reduced state-level protections for AI development. Global AI dominance, the order said, would require American companies to be “free to innovate without cumbersome regulation.”Sacks repeated the administration’s opposition to state-level rules elsewhere at Davos as well. In a recent interview with CNBC, Sacks criticised California’s proposed billionaire wealth tax, a one-time, 5% tax on total wealth for residents worth more than $1 billion, which will be on the ballot in November.“It’s not a one-time, it’s a first time. And if they get away with it, there’ll be a second time and a third time. And this will be the beginning of something new and different in this country,” Sacks, who moved from California to Texas last month, said. Sacks is one of several wealthy California residents who have criticised the proposal and decided to leave the state, including Google founders Larry Page and Sergey Brin. Speaking to CNBC, he called the plan a potentially “scary direction” of state overreach.Despite Silicon Valley leaders’ departures and some AI companies’ welcoming the Trump administration’s reduced regulations, the unrestricted approach to AI development has also faced criticism as research advances rapidly. Concerns about automation-driven job losses, a financial market collapse, and the spread of potentially unsafe AI models have reduced some of the stock market’s AI enthusiasm.Even some AI leaders are concerned. In November, Anthropic CEO Dario Amodei said on 60 Minutes that he was “deeply uncomfortable” with how AI companies were now being tasked with self-governing, saying he preferred “responsible and thoughtful regulation of the technology.”Supporters tend to justify reduced regulation as necessary to keep pace with AI competitors in China. China’s AI research is rapidly closing the gap with the US, as some models, particularly those developed by the Hangzhou-based startup DeepSeek, are matching or even exceeding Western models’ performance in specific reasoning tasks.In his conversation with Benioff, Sacks cited recent research on global AI optimism rates, published in 2025 by Stanford University’s Institute for Human-Centered Artificial Intelligence. Optimism was high in China, where 83% of survey respondents saw AI as more beneficial than harmful. To compare, in the US, only 39% felt as optimistic.But while figures like Trump and Sacks call for an AI approach free of restraints, pessimism is not a strictly partisan issue in the US. In December, Florida Governor Ron DeSantis, a former Republican presidential hopeful, also called for more limits on data centre construction. Last week, a bipartisan House committee heard testimonies on the impact of AI in K–12 education. While some Republican committee members cautioned against hindering innovation through additional regulation, there was broad consensus on the potential risks of exposing children to AI.
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