President Donald Trump has rescinded Joe Biden's executive order on artificial intelligence regulation just hours after returning to the White House, marking a dramatic shift in federal oversight of the rapidly advancing technology.

The move, announced on Monday, immediately halts the implementation of key safety requirements that had mandated leading AI companies to share test results and critical information about powerful AI systems with the federal government. The 2023 order had also established the US AI Safety Institute under the Commerce Department to develop voluntary guidelines for the technology's use.

A White House spokesperson said: "The previous administration's heavy-handed approach to AI regulation threatened American innovation and competitiveness. This action reaffirms our commitment to maintaining US leadership in AI through free market principles."

The policy reversal comes as other nations move to establish comprehensive AI regulations. The European Union recently passed its AI Act, introducing strict oversight for "high-risk" AI applications in sectors like healthcare and law enforcement.

The Republican Party's 2024 platform had specifically targeted Biden's order, stating: "Republicans support AI development rooted in free speech and human flourishing." The platform claimed the regulations hindered technological innovation.

While Trump's administration has not yet detailed replacement policies, it is expected to maintain some focus on US competitiveness against China in AI development. During his first term, Trump issued executive orders that established principles for government AI use and increased research funding.

The regulatory void at the federal level has prompted several states to develop their own frameworks. California has passed legislation addressing AI deepfakes and training data transparency, while Colorado and Illinois have enacted laws protecting against algorithmic discrimination in hiring.

Maria Henderson, executive director of the AI Policy Institute, said: "Without federal guardrails, we're likely to see a patchwork of state regulations emerge. This could create significant compliance challenges for AI companies operating across multiple jurisdictions."

Trump meanwhile directly benefitted from the use of AI generated misinformation during his campaign, and in August posted fake images that depicted an endorsement from pop star Taylor Swift.

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