By Amrith Ramkumar, Natalie Andrews and Meghan Bobrowsky
WASHINGTON -- When President Trump was deciding whether to move forward with a long-awaited executive order on the dangers posed by artificial intelligence, David Sacks turned to a familiar refrain.
The venture capitalist and Trump adviser warned in a Thursday call with the president that the order's voluntary process for government testing of AI models could lead to mandatory regulations that slow down the industry in its race with Chinese competitors, according to people familiar with the matter. Sacks argued the order would give a victory to so-called AI doomers who propose strong guardrails to limit the risks posed by the technology, the people said.
Already on the fence about the order, Trump said he shared concerns about China and worried about hindering AI investment, just a week after a summit with China's Xi Jinping in Beijing.
Shortly after the discussion, Trump postponed the signing and told reporters he wouldn't sign the order, adding to the chaos surrounding the White House AI strategy and giving Sacks one of his biggest wins in Washington.
The drama showed Sacks is as influential as ever, catapulted in part by the president's fear of losing the nation's lead in AI. The move marked a win for business-minded officials wary of Chinese competition, who were at risk of losing ground to National Cyber Director Sean Cairncross and security-focused officials pushing for more oversight.
"We're leading China, we're leading everybody, and I don't want to do anything that's going to get in the way of that lead," Trump told reporters Thursday. In the afternoon, after Trump had canceled the signing, Sacks and the president talked again, this time in the Oval Office, the people said.
Earlier this year, Sacks left his formal role as AI and crypto czar to become co-chair of a White House advisory group working on science and technology. Some MAGA leaders including former Trump adviser Steve Bannon, who had hoped the move was made to sideline Sacks, were upset by Thursday's events.
"That's prime-time David Sacks," Bannon said in an interview. He recently sent a letter to Trump, along with about 60 conservatives in favor of AI regulation, asking the administration to require mandatory AI-model testing, a step beyond the now-shelved executive order.
Some White House aides believed Trump had already signed off on the order and are livid that Sacks circumvented the policy process, administration officials said.
Bannon said bad outcomes from speeding up AI deployment will eventually lead to more regulation. "The accelerationists are only accelerating the damage they're doing to the structures of society," he said.
Trump discussed the order Thursday afternoon with Sacks's friend and former colleague Elon Musk and Meta Platforms Chief Executive Mark Zuckerberg after deciding to shelve it. Musk said on X he hadn't seen the executive order and spoke to Trump after his decision. Zuckerberg didn't speak to the president until after the event had been canceled, a spokesman said.
Axios and other media outlets earlier reported some of the interactions between Sacks and Trump.
Despite not being in the White House day to day, Sacks has remained a trusted adviser to Trump. The two still talk regularly, with Sacks often citing the China threat and investment in data centers to run AI models across the country, according to people familiar with their relationship.
Administration officials say it is important for the economy and security that the U.S. wins the tech race. They want the world to run on democratic models rather than tools that can be controlled by the Chinese government.
But there is division about China's AI capabilities and how best to preserve U.S. leadership.
Many industry analysts estimate the U.S. is ahead by several months, claiming that the most powerful tools from Anthropic and ChatGPT maker OpenAI are better than models from China's DeepSeek and others.
But many of the Chinese products are open source, meaning they publicly share details about the tools and make it easy for users to download and modify them. Some administration officials worry China's advantage in such models will get other countries hooked on the technology.
Many analysts disagree with Sacks, arguing that it is possible to have reasonable guardrails while giving priority to innovation.
"It's unclear how much of this is an excuse about China versus they're not really interested in doing any regulation," said Rayid Ghani, a Carnegie Mellon University professor who studies AI.
A conservative libertarian who was part of the "PayPal mafia" alongside Musk and Peter Thiel, Sacks has touted the economic benefits of AI in response to a growing backlash from Americans. In recent months, Sacks played a role in the White House campaign to kill state AI regulations, though Congress has balked at such proposals. Late last year, he helped convince Trump to sign an executive order attacking states that pursue onerous AI rules.
"It's not really clear exactly what it is that the people who are really afraid want other than for everything just to stop...China is not going to stop," Sacks told Politico recently.
Work on the recent executive order picked up after the release of Anthropic's Mythos, a model capable of launching cyberattacks and identifying software vulnerabilities. Cairncross and others pushed for cybersecurity-focused officials to work with the private sector on addressing weaknesses.
The factions within the White House went back and forth for weeks before previewing it for industry executives earlier in the week. The administration had invited executives to Washington for the Thursday signing and was setting up the room for the ceremony when Trump pulled the plug, people familiar with the matter said.
Tech executives hailed Trump's decision to put the order on ice. David Casem, CEO of AI and telecom company Telnyx, previously had a mixed view of Sacks. But, he said, "I'm happy to put that all aside if he's able to keep Trump on the right track."
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com, Natalie Andrews at natalie.andrews@wsj.com and Meghan Bobrowsky at meghan.bobrowsky@wsj.com
(END) Dow Jones Newswires
May 22, 2026 21:00 ET (01:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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