· Insights · 5 min read
AI in a Political Land: Navigating When to Act
The changing political landscape presents both challenges and opportunities for AI governance. The two main strategies for approaching this uncertainty are proactive action and a wait-and-see approach.
Regardless of the strategy, board members should focus on proactive risk assessment and preparing for various scenarios while maintaining flexibility to respond to actual outcomes.
Unless you’ve been hiding under a rock, you’re very aware of the outcome of the 2024 presidential election. What’s less certain is what the next presidential and congressional terms will mean for AI regulation, though there has certainly been a lot of speculation. So, what am I doing here? More speculation, though let’s call it meta speculation.
In general, there are two high-level approaches that organizations can take when there is a shift in the political landscape that is likely to impact their business:
- Develop a hypothesis about the most likely outcomes and take action, or
- Take a “wait-and-see” approach before making moves
There are benefits and drawbacks to each approach, and boards should assess which method best addresses the risks and opportunities that are relevant to their organization (…although in reality, it’s likely going to be a blend).
Creator vs. Consumer Impact
The impact of potential regulations or legislation is likely to be felt more strongly by companies that are developers of AI tools and products than it is for those companies that are users or consumers of said AI. Companies who develop solutions that heavily rely on third-party AI models fall somewhere between the two.
Creators
Companies who are AI creators (and to a lesser degree, those who leverage the creators for their own products and services) are in the front lines of the political impact: they often have the most to gain or lose from government action (or inaction). When we think of “Big Tech,” they generally fall under this category, but with the lobbying budgets and cache to better influence and address government action. It’s more difficult for companies who are significantly impacted, but don’t have the means to influence the direction of regulation and legislation.
Consumers
Consumers of AI experience the trickle-down impact of government decisions, but are frequently unable to do much about it. Given this, their response to the changing political current tends to be more reactive than proactive. Boards of organizations that are AI consumers should consider what emerging risks and opportunities may present themselves in a new political regime.
Proactive Risk Assessment
Even if a company’s board decides to wait and see how the political shift plays out, it’s wise to undertake a risk assessment proactively, so that the board is ready to act when the time comes.
This is a good time to remind boards that risk identification does not need to be (nor should it be) one-sided: your risk register should address risks on either end of the spectrum. For example, if the Trump administration essentially shuts down open source AI, what are the corresponding risks to your organization? What if the administration instead encourages open innovation?
While this post focuses on changes to the federal government, there are also changes at the state-level as a result of the election. These may be direct (i.e., state governments changing from one political party majority to the other) or indirect (i.e., state governments responding to federal actions and inactions). For organizations that operate in a multi-state environment (which in today’s world is a growing percentage of organizations), identifying state-level requirements that might impact them is essential to successful operations.
Board Considerations:
- AI Vendors: Will your current AI providers continue to provide services/products as they do currently? Would changes to laws and regulations result in changes to how you’re able to utilize these? Will a new political environment result in new vendors entering the market?
- Financial exposure: If it looks like costs will increase with AI providers (whether due to market concentration, import/export changes, government incentives, or simply the way that the wind is blowing), does it make sense to invest in internal resources, such as open source models that are run on owned/rented servers? Will your product/service pricing be impacted, or will you attempt to absorb an increase in AI expenses?
- Global impact: Do you rely on markets (either with respect to vendors or customers) that may be subject to tariffs, restrictions, or export controls? Are there structural or more existential changes that your organization would have to make to successfully navigate these?npm r
Wait-and-See Approach
Boards will likely lean towards the “wait and see” approach with respect to risk treatment or taking advantage of opportunities. It’s time consuming and expensive to change organizational systems and processes, so boards (rightfully) want to be sure that their actions are in line with what actually comes to pass. An important caveat is that it takes prior planning to be able to act quickly, so boards should make sure they’ve considered reasonable outcomes and are ready to respond to whichever one comes to fruition.
Board Considerations:
- AI Vendors: Keep an eye out for new AI vendors that may emerge if the environment is one that encourages innovation. Conversely, if incumbent technology is promoted, ensure that you’re able to access these tools and services.
- Financial exposure: If the political changes result in fewer AI entrants to the market, assess the financial risks associated with an AI oligopoly - are your costs likely to increase, and to what degree do you have control over this?
Planning for Change
Change is inevitable - the question is how and when, not if. Administrative shifts provide a clear point-in-time change that is fairly abrupt, but boards can prepare by:
Staying informed on relevant political developments
Monitoring technological advancements
Tracking market conditions and trends
Maintaining flexibility in response strategies
Board Consideration: Prior planning is essential for quick action when needed - ensure your organization has considered reasonable outcomes and prepared appropriate responses.