Silicon Valley Cheers Hands-Off AI Rules as OpenAI Fires Safety Team

$13.5 billion in federal defense funds will flow to AI and autonomous systems this year. Venture capitalists and AI founders packed San Francisco restaurants during Tech Week to celebrate the Trump administration's hands-off stance on regulating their industry.

That stance is now policy. On his first day in office, President Donald Trump repealed a Biden-era executive order on AI risks. In December, Trump signed an order blocking state-level AI regulations. The administration has scrapped requirements that developers share safety test results with the federal government.

PitchBook research director Kyle Stanford framed the opportunity at an Andreessen Horowitz panel. "The U.S. government, for the first time, is allocating $1 trillion to its defense spending. And $13.5 billion of that will go to autonomous systems and AI," Stanford said. "That has obviously brought a lot of capital into defense tech spending, more than we've ever seen."

What does the 308-word White House pact actually require?

The agreement Trump signed last month asks advanced AI labs to follow safety protocols and set up internal monitoring teams. Signatories included OpenAI, Anthropic, Meta, Google, SpaceXAI, and Nvidia. Details on enforcement are absent.

"I'm seeing tremendous self-policing," Trump told reporters after the ceremonial signing.

Critics say the document offers little. Sarah Myers West, a former senior AI adviser at the FTC and now co-executive director of the nonprofit AI Now, said voluntary frameworks have a record.

"Across the board, this self-regulatory approach has consistently done one thing, which is failed to work," Myers West said. "It's failed to in any meaningful way ensure that these companies are honestly even keeping their house in order. All that they're getting is grace from this government."

The upshot: the pact preserves wide operating latitude without hard limits.

Why are safety researchers warning of danger?

Three OpenAI researchers posted this week that they were fired, writing that "fear and unclear rules stymie AI safety work." David Robinson, who resigned from OpenAI's safety team, said self-policing is no substitute for law.

"This is no substitute for hard law, and it does give a lot of freedom to the companies," Robinson said. "The time between model generations is measured in weeks … and I think we have some very serious safety challenges in front of us in the nearer term."

Their warnings followed an October resignation by an Anthropic engineer who called for a pause on "superhuman" systems. OpenAI CEO Sam Altman and Anthropic CEO Dario Amodei later echoed calls to slow development. Critics read those public manifestos as investor optics ahead of expected public listings and midterm elections.

Anthropic disclosed on Friday that its agents filed a false tip to a Philadelphia police website about an unsolved homicide. The White House reminded the company that transparency is "not optional. It is a critical national security obligation."

The pattern is clear: safety teams raise alarms, then leave.

What oversight still exists?

The FTC has opened an investigation into OpenAI, Anthropic, and other companies over consumer harms. Trump appointed National Intelligence Director Jay Clayton and FTC Chairman Andrew Ferguson to his new "Super Intelligence Force."

OpenAI has committed to embed external assessors and finalize third-party safety contracts, a spokesperson said, referring questions about the firings to a company post stating the researchers violated "clear policies on handling sensitive information."

Google pointed to CEO Sundar Pichai's post that the company conducts appropriate testing and collaborates "to establish norms and build public confidence." Meta referenced new training standards and board governance. Nvidia and SpaceXAI did not respond.

Graham Steele, a former U.S. Treasury assistant secretary, raised a structural concern. "We live in a democratic society. Are they the right ones to have the power to be able to make decisions that have broad, structural, social, and political consequences?" Steele asked.

The bottom line: the federal bet rests on labs policing themselves.

What's next

The FTC probe is the first concrete test of Washington's tolerance. Expected public listings at OpenAI and Anthropic will force fresh disclosures on safety incidents and policy exceptions. The $13.5 billion defense commitment, meanwhile, gives labs reason to favor growth over transparency, even as their own safety teams walk out the door.

By Olivia Hart