A draft executive order to create a self-regulatory organisation for frontier AI companies has circulated inside the Trump administration in recent weeks but has stalled after failing to win support from senior officials or the president, according to The Information. The draft, viewed by two people familiar with it, calls for the creation of a self-regulatory organization for AI companies that produce state-of-the-art models.
The proposal draws heavily on an idea Google DeepMind chief executive Demis Hassabis laid out publicly on 14 July, when he called for the creation of a new regulatory body to oversee frontier model releases in an X post, titled "A Framework for Frontier AI and the Dawning of a New Age," making the case for a "standards body" modeled after the Financial Industry Regulatory Authority. Under his plan, frontier labs would initially share their models with the body voluntarily, up to 30 days before release, for safety testing that probes dangerous cyber, biological and "deception" capabilities, with formalization "could quickly follow" once the testing regime proves effective. Hassabis has said he wants the body operational quickly: according to Axios, Hassabis told Axios he wants the thing running within 'months,' ideally before the end of 2026, and that the administration's private signals have been positive.
Treasury Secretary Scott Bessent has separately pursued a version of the concept inside government. Three days after Hassabis published his piece, Bloomberg reported that the White House is reviewing a proposal, developed with Treasury Secretary Scott Bessent's involvement, based on this FINRA template. More recent reporting indicates Hassabis has taken the pitch directly to officials, having personally briefed Treasury Secretary Scott Bessent and OSTP Director Michael Kratsios on his FINRA-style AI standards body, in private meetings that are a different kind of political engagement, one that can shape regulatory design before any public deliberation occurs. The idea has drawn a mixed but broadly receptive reaction from industry: even former White House AI czar David Sacks, who has generally resisted anything resembling licensing, said he thought the idea had merit and was better than having the government trying to regulate frontier AI directly.
The stalled order would go beyond Trump's existing framework. In June, Trump signed a narrower executive order on AI cybersecurity that created a voluntary 30-day pre-release review process while explicitly ruling out anything resembling mandatory licensing, a distinction that appears central to why the new self-regulatory proposal has struggled to gain traction among officials wary of anything that could "harden into a de facto licensing regime," a concern Sacks reportedly raised before an earlier version of that order was abruptly pulled in May, according to Lawfare. Sacks purportedly raised concerns held by some in the AI industry that a "voluntary" review system could harden into a de facto licensing regime, slow the pace of American AI development, and hand China the lead.
Beyond the standards-body debate, the administration is also revisiting export controls on advanced chips. Officials are said to be preparing a revised version of the Biden-era AI diffusion rule aimed at closing a loophole that allows Chinese firms to rent remote access to advanced US chips, even as some in the administration weigh broader semiconductor tariffs that chipmakers warn could blunt America's AI competitiveness at a moment when, as one industry figure put it after a rival Chinese model release, "this is how you lose the AI race," per CNBC.
Go deeper: Designing a FINRA for Frontier AI (Lawfare), The U.S. Is About to Design an AI Regulator. Here's How to Get It Right (Council on Foreign Relations)