ALFA Field Notes

Opposing Biden's AI Rule -- More U.S. Tech Investment -- Public Safety

March 04, 2025

Biden’s AI Diffusion Rule Hurts America’s Technological Leadership

In the waning days of the Biden administration, the Department of Commerce’s Bureau of Industry and Security (BIS) released controls on what and where America’s chip makers could sell. At the time, ALFA said of the rule: “The AI chip market is among the most sought-after in the world — and fortunately, American companies are the ones setting the pace. Yet, by taking American products off the playing field, the U.S. risks ceding tech leadership to foreign competitors, especially those backed by the Chinese government.”

Today, the ALFA Institute is encouraging the Trump administration to revoke this Biden rule. In a new piece, our Chairman, Speaker Kevin McCarthy explains how this misguided rule will hurt America’s technological leadership.

Proponents of the diffusion rule would lead you to believe that this policy is tough on China. They think that AI should be treated as a weapon, closely guarded by a select few nations, and run by an even smaller number of “validated end users.” And that America can maintain our slim yet meaningful lead in the all-important race for AI dominance through more bureaucratic regulations and red tape.

The only problem? The Chinese Communist Party didn’t even bat an eye at the rulemaking. No saber-rattling or public threats of retaliation.

Rather, there is every reason to believe that Beijing is secretly celebrating this last-minute gift from President Biden—one which provides CCP-backed companies like Huawei and Tencent with a critical opening to capture vast new market share from South America to Southern Europe, surpass the United States as the world’s leading provider of AI infrastructure, and gain key geopolitical influence in the process.

U.S. Tech Investment Continues

President Trump announced yesterday an investment of at least $100 billion into American chip manufacturing by the leading manufacturer, Taiwan Semiconductor Manufacturing Co. (TSMC).

Adding to TSMC’s existing U.S. footprint (which was first announced in 2020 and later expanded), this brings the chip maker’s total investment to $165 billion. It is reported that this investment will support three new fabs, two packaging facilities, and a research and development center.

This announcement joins other significant U.S. technology investments, including the $500 billion Stargate project. As we have said, these investments “declare energy dominance, technological sovereignty, and economic might” as American imperatives for the next century.

Public Safety

A few weeks ago, we wrote about the technological advancements (primarily through satellites) that are assisting with fighting wildfires. This week, the Wall Street Journal published a piece on AI-powered cameras in California that are helping to detect new fire activity, and “making a hell of a difference.” The trend is clear: tech integration in public safety can save lives, property, and reduce the overall hardship that comes when daily life is disrupted or threatened.

This tech integration extends beyond firefighting and is helping law enforcement as well. Examples include companies like Flock Safety which are providing tools to quickly identify, locate, and apprehend criminals.

In a conversation late last year, a16z co-founders Marc Andreessen and Ben Horowitz sat down with two leaders of Las Vegas law enforcement to talk about how technology has helped their departments fight crime and keep communities safe.

Tech developments and announcements are happening at breakneck pace. It’s tough to keep up. It’s even tougher to understand the impact after a product launch, bill introduction, or fundraising announcement. The nature of our media has a bias towards announcements over action — which we have long thought is a gaping hole in the information game.

To better tell the American technology story, company leaders and policymakers must get out and communicate directly with the constituents of these products — before and during their deployment. Results matter, and these are the type of American stories that inspire continued investment in capital and labor for America.

Thanks for reading and have a great day.

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