Kevin Hassett, director of the White House National Economic Council, has come out against plans to create a new federal agency that would approve artificial intelligence systems. He warned that setting up such a bureaucracy would push AI innovation to China, as the administration weighs an executive order on the technology.
Agency proposal under fire
The idea of a standalone AI approval body has been floated within policy circles as a way to centralize safety checks. But Hassett told reporters that building a new bureaucracy from scratch would be a mistake. He argued that the process would slow down development and hand an advantage to Chinese companies that face fewer regulatory hurdles.
His comments mark the first clear opposition from a senior White House official to the concept. They come as the administration is putting together an executive order that could shape how AI is regulated at the federal level.
Innovation risk cited
Hassett's warning centers on the global competition for AI supremacy. China has invested heavily in AI research and deployment, and the White House official fears that heavy-handed regulation in the U.S. would accelerate the migration of talent and investment overseas. He didn't specify which Chinese firms or initiatives, but the implication was clear: slower approval processes in America could mean faster progress abroad.
The NEC director's stance signals that the White House may lean toward a lighter regulatory touch, relying on existing agencies like the Federal Trade Commission or the National Institute of Standards and Technology rather than a new entity. That approach could satisfy industry groups that have lobbied against additional red tape.
What the executive order might include
The exact contents of the upcoming executive order remain under wraps. But Hassett's opposition narrows the range of options. If the White House follows his advice, the order would likely focus on guidelines for federal use of AI, voluntary standards for private companies, and increased funding for research — not a new approval gatekeeper.
Some advocates for stricter oversight have argued that without a dedicated agency, safety gaps will persist. But Hassett pushed back on that line of thinking, suggesting that the current regulatory toolkit can adapt.
The debate comes at a moment when generative AI tools are spreading rapidly through the economy. Lawmakers on Capitol Hill have held hearings but passed no major legislation, leaving the executive branch to take the lead.
For now, the question is whether the final executive order will include any new regulatory structure or stick to the hands-off approach Hassett is endorsing. The administration hasn't set a release date, but the order is expected in the coming weeks.
