Trump targets AI “bias” with executive order threatening $200M in contracts

The Trump administration is planning an executive order that would require AI companies receiving federal contracts to ensure their chatbots are “politically neutral and unbiased,” targeting what officials perceive as “liberal bias” in AI models. This move could jeopardize up to $200 million in Defense Department contracts recently awarded to major AI firms including Anthropic, Google, OpenAI, and xAI.

What you should know: The executive order specifically targets AI systems deemed “woke” by the administration and comes amid broader efforts to boost US competitiveness against China in artificial intelligence.

• The Chief Digital and Artificial Intelligence Office (CDAO), the Pentagon’s AI division, awarded contracts worth up to $200 million earlier this month to accelerate Defense Department adoption of advanced AI capabilities for national security challenges.
• The order is expected to arrive this week alongside other AI competitiveness measures, despite internal pushback from AI Czar David Sacks and senior White House policy adviser Sriram Krishnan.

The big picture: Trump has moved quickly to reshape AI policy since taking office, rescinding Biden-era executive orders focused on AI safety and trustworthiness while promoting massive private investment in the sector.

• Shortly after inauguration, Trump rescinded Biden’s executive order on safe and trustworthy AI, which acknowledged AI’s potential to “exacerbate societal harms such as fraud, discrimination, bias,” and disinformation.
• The administration simultaneously announced Stargate, a joint venture between Oracle, SoftBank, and OpenAI planning $500 billion in AI infrastructure investment over four years.

Why this matters: The order highlights ongoing tensions over AI bias and content moderation, issues that have plagued major AI systems across the political spectrum.

• AI models have produced controversial outputs on both sides, from Google’s Gemini generating historically inaccurate images to xAI’s Grok expressing support for Nazis.
• The move could create new compliance challenges for AI companies seeking government contracts, potentially affecting how they train and deploy their models.

What’s at stake: Federal AI contracts represent significant revenue streams for major tech companies as the government increasingly relies on AI for national security applications.

• The four companies named in the recent Defense Department contracts—Anthropic, Google, OpenAI, and xAI—would need to demonstrate political neutrality to maintain their federal funding.
• The requirement could influence how these companies approach content moderation and bias mitigation in their AI systems more broadly.