China Hawkishness Will Continue Until Morale Improves
Last Week in AI Policy #9 - March 4, 2025
Delivered to your inbox every Monday, Last Week in AI Policy is a rundown of the previous week’s happenings in AI policy and governance in America. News, articles, opinion pieces, and more, to bring you up to speed for the week ahead.
Last week saw the steady continuation of existing trends in AI, in both industry and politics. Model releases from OpenAI and Anthropic saw modest increases in model size, features, and performance on benchmarks, in an apparent continuation of scaling. Notably, Anthropic’s testing suggests that upcoming models may meaningfully increase risks from chemical, biological and nuclear weapons. In the policy world, the new administration continues to beat the anti-China drum, maintaining (if not intensifying) the outlook of the previous administration.
These developments, and more, below.
Federal Government
The Trump administration moves to tighten restrictions on semiconductor exports to China.
Signaling an intensification of the technological containment efforts initiated under Biden, U.S. officials recently met with Japanese and Dutch counterparts, to press for coordinated curbs to prevent engineers from select companies from maintaining semiconductor equipment within China. These restrictions would mirror existing limitations placed on companies such as Lam Research and Applied Materials. Washington is also considering targeted sanctions against Chinese firms, and stricter export controls on NVIDIA's chips specifically designed for China. The new administration’s approach revives previous stalled negotiations with allies and embraces tougher stances previously advocated by Biden's more hawkish advisers.
Vice President J.D. Vance will deliver a keynote address at the upcoming American Dynamism Summit in Washington.
Vance, a former venture capitalist with deep connections to Silicon Valley, has previously warned against "excessive regulation" of AI, positioning himself and the administration as advocates for a more laissez-faire approach to ensure American technological dominance. The summit, organized by prominent Silicon Valley venture capital firm Andreessen Horowitz, who have been vocal critics of previous attempts to regulate frontier model developers. His speech comes amid increasing influence of tech-sector voices in federal policymaking, amplified by substantial financial backing and key tech and tech-adjacent appointments, including: David Sacks, Michael Kratsios, Jacob Helberg, Sriram Krishnan, and more.
Select Committee on the CCP urges the United Kingdom to halt plans for a Chinese “super-embassy” in London.
In a letter to the UK's American Ambassador, Lord Mandelson, Representatives Moolenaar (R-MI) and Chris Smith (R-NJ) highlighted serious concerns over granting China increased diplomatic leverage amid ongoing human rights abuses, including forced labor practices and transnational repression operations targeting dissidents within the UK and Europe. The lawmakers criticized the UK's potential accommodation of the CCP's largest European diplomatic compound at the historic Royal Mint Court, warning it could embolden espionage efforts and amplify China's coercive economic and political tactics. The letter also explicitly called for coordinated efforts to secure the release of political prisoner Jimmy Lai, a UK citizen detained in Hong Kong, one of the cities most prominent pro-democracy activists.
Select Committee Chairs John Moolenaar (R-MI), Roger Williams (R-TX), and Brian Babin (R-TX) have launched a joint effort to protect U.S. innovation from CCP exploitation.
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs (set to expire in September 2025) distribute billions annually to American small businesses to support technological innovation. Several committees have expressed growing concern that Chinese entities, including those linked to the CCP, are systematically targeting the programs through investment vehicles, research collaborations, and talent recruitment schemes. In response, the chairs have requested detailed information from all 11 participating federal agencies to assess security protocols, identify flagged risks, and strengthen protections against foreign influence.
Senators urge Federal Energy Regulatory Commission to prevent AI energy strain from impacting electricity supply.
As America's hunger for artificial intelligence and data center capacity surges, Senators Chris Van Hollen (D-Md.), Cory Booker (D-N.J.), Mark Kelly (D-Ariz.), and Tim Kaine (D-Va.) have called on the Federal Energy Regulatory Commission (FERC) to ensure this demand doesn't strain the nation's power grid or hike electricity bills for ordinary Americans. With data centers projected to account for 12% of U.S. electricity consumption by 2028—up sharply from 4.4% in 2023—the senators urged FERC to convene a technical conference to identify innovative and sustainable solutions. They emphasized the need to prevent potential disruptions in electric service, avoid escalating consumer costs, and limit increased pollution from fossil-fuel power plants, which might otherwise remain operational or be newly constructed to meet growing energy needs.
State Government
Virginia lawmakers have approved landmark legislation mandating site assessments for artificial intelligence data centers.
The bill indicates increased regulatory scrutiny in Virginia: one of the nation's key data infrastructure hubs, and home to the largest concentration of data centers in the world. HB 1601 requires local governments to evaluate the environmental impacts of proposed AI-focused data centers, including their effects on electric infrastructure, water resources, farmland, parks, historic sites, and nearby communities, prior to approval. Prompted by growing concerns over data center expansion, the bill responds to recent state audits highlighting strains on infrastructure and risks of increased residential electricity bills. Governor Glenn Youngkin has been a prominent advocate of data centers, touting their economic benefits, but faces increasing pressure to balance industry growth with sustainable resource management and community impacts. The legislation pends final approval in the state Senate.
Press Clips
Big fines coming for US export violations, says ex-Commerce official, as China sales probed (Reuters)
AI safety advocates slam Trump administration’s reported targeting of standards agency (Fortune)
Pollution from Big Tech’s data centre boom costs US public health $5.4bn (Financial Times)
Human Therapists Prepare for Battle Against A.I. Pretenders (New York Times)
A new generation of AIs: Claude 3.7 and Grok 3 (Ethan Mollick)
Manufacturing’s Missing Revolution: Lessons the techno-industrial competition with China (ChinaTalk)
Peak Brussels (Anton Leicht and Jack Wiseman)
AI chip smuggling is the default, not the exception (AI Policy Bulletin)
DeepSeek and Destiny: A National Vibe Shift: How an AI startup reignited the concept of national destiny (ChinaTalk)
AI-Powered Lawyering: AI Reasoning Models, Retrieval Augmented Generation, and the Future of Legal Practice (Minnesota Legal Studies)
Technological inevitability & human agency in the age of AGI | DeepMind's Allan Dafoe (80,000 Hours Podcast)
Unbundling the AI Safety Pitch (Anton Leicht)
