Trump Administration Circulated Draft EO to Create AI Self-Regulatory Organization, but Proposal Has Stalled
Summary
Updated Aug 29 — Proposal backed by Treasury's Bessent but opposed by former AI czar Sacks as a 'Trojan horse' that would disadvantage open-source AI developers.
- • Some Trump administration officials circulated a draft EO proposing a new AI self-regulatory organization
- • The draft has stalled — needs sign-off from President Trump and other administration officials
- • An AI SRO would place compliance oversight within industry rather than a federal regulatory agency
- • Reported by The Information; no draft has been publicly released or formally announced
Updates
Hassabis proposed FINRA-style SRO in July blog post
DeepMind chairman Demis Hassabis formalized the concept in a July blog post, calling for a FINRA-modeled body that would require labs to share security notes, conduct safety testing, and write industry rules.
Treasury Secretary Bessent backed the AI SRO proposal
Scott Bessent, Trump's Treasury Secretary, was among the supporters of the proposed self-regulatory organization for the AI industry.
Sacks called it a 'horrible idea' and open-source Trojan horse
Former White House AI czar David Sacks strongly opposed the proposal, arguing it would allow frontier labs to push compliance standards that open-source developers couldn't meet — effectively functioning as a ban on open AI development.
Frontier lab standards seen as disadvantaging open-source rivals
Critics noted that a FINRA-style model, historically associated with protecting incumbents, could entrench large labs by embedding their preferred standards as industry requirements, at the expense of smaller and open-source competitors.
Details
Draft EO proposes new independent AI self-regulatory organization
Some Trump administration officials internally circulated a draft executive order calling for the creation of an independent self-regulatory organization (SRO) to oversee AI governance, per The Information.
Draft has stalled — needs Trump and key officials to buy in
The proposed EO requires approval from President Trump and additional administration officials before it can advance; as of reporting, the draft had not progressed further.
SRO model places oversight inside industry rather than federal agencies
A self-regulatory organization approach mirrors structures like FINRA in finance — industry-led compliance and standards bodies — rather than imposing direct federal regulatory authority over AI.
First known formal AI governance proposal from Trump administration
Despite AI's prominence in policy discussions, this is the first known internal draft of a formal AI governance structure to be circulated within the current Trump administration.
Draft details not publicly released; remains an internal document
No text of the draft EO has been officially released or announced; reporting is based on sources familiar with its internal circulation in recent weeks.
Source: The Information (Leo Schwartz, August 2026). Article text unavailable — based on curator summary and headline reporting.
What This Means
The Trump administration has internally circulated a draft executive order that would create an independent self-regulatory organization for AI — the first known formal AI governance proposal from within the current administration. The draft has reportedly stalled, requiring buy-in from President Trump and other key officials before it can move forward. An SRO model would place AI compliance oversight within the industry rather than a federal regulatory agency, consistent with the administration's deregulatory orientation. The proposal's uncertain status reflects the broader challenge of building internal consensus on how — or whether — to formally govern AI development, even as the sector grows rapidly.