Comments of the R Street Institute in Request for Information on Regulatory Reform on Artificial Intelligence

The R Street Institute advocates for significant federal regulatory reforms across energy infrastructure, autonomous vehicles (AVs), cybersecurity, and copyright law to ensure U.S. leadership in artificial intelligence (AI). The organization argues that existing regulations, often designed for pre-AI technologies, create systemic barriers, such as inadequate power supply for AI data centers, prescriptive AV safety standards, outdated cybersecurity frameworks, and copyright litigation risks that could impede AI training. Key recommendations include streamlining energy infrastructure development, modernizing AV safety standards to be performance-based, adapting cybersecurity protocols for AI's continuous evolution, and affirming AI training as transformative fair use to avoid crippling liabilities and foster innovation.

Analysis

The R Street Institute advocates for comprehensive federal regulatory reform to solidify U.S. leadership in Artificial Intelligence (AI), aligning with President Trump's Executive Order 14179 for a more open regulatory environment. The institute identifies critical barriers across energy infrastructure, autonomous vehicles (AVs), cybersecurity, and copyright law, which currently hinder AI innovation and deployment. This proactive stance aims to remove systemic obstacles to American competitiveness on the global AI stage.

Existing energy regulations create significant hurdles for AI data centers, which demand over 500 megawatts per facility, with 2,600 GW of generation capacity stalled in interconnection queues due to outdated processes. Similarly, outdated federal motor vehicle safety standards impede AV deployment by failing to accommodate AI-driven systems, while current cybersecurity frameworks inadequately address AI-specific vulnerabilities like adversarial examples. Copyright law presents substantial litigation risk, with over 50 lawsuits potentially leading to trillions in liability for AI companies.

R Street proposes market-based solutions, including streamlining energy permitting, adopting performance-based AV safety standards, and modernizing FedRAMP for AI's dynamic nature. Crucially, it advocates for recognizing AI training as transformative fair use, rejecting "market dilution" and compulsory licensing, to prevent crippling liabilities and foster American AI competitiveness. The overall sentiment suggests that these reforms are vital for unlocking AI's economic potential and maintaining U.S. technological superiority.

Key Decisions for Investors

• Monitor legislative and regulatory progress on AI-related reforms, particularly concerning energy infrastructure, AV standards, and copyright law, as these will directly influence operational costs and market viability for AI-centric businesses.
• Assess AI-exposed companies for their strategic positioning relative to these regulatory shifts, favoring those with robust lobbying efforts or business models less susceptible to current regulatory friction.
• Evaluate potential long-term investment in sectors benefiting from anticipated regulatory easing, such as AI data center developers, autonomous technology firms, and content platforms adapting to fair use interpretations.