AI regulation future in US remains uncertain: GlobalData

In November 2024, Donald Trump was re-elected as President of the US, with Elon Musk appointed to lead the newly established Department of Efficiency. Musk’s role focuses on streamlining government processes and integrating advanced technologies, a development that marks a significant shift in the regulatory landscape for artificial intelligence (AI) and other emerging technologies. However, some industry experts are skeptical, questioning whether Musk’s unconventional methods and Trump’s leadership will ultimately benefit AI regulation and the market at large, says GlobalData.

According to GlobalData’s forecasts, the global AI market is set to reach over $1 trillion by 2030, up from $103 billion in 2023, with a compound annual growth rate (CAGR) of 39 per cent over the period.

Kamilla Kan, Senior Data Scientist, Medical Devices team at GlobalData, states, “With the increasing adoption of AI across sectors, the need for robust, forward-thinking regulations is more critical than ever. Musk’s appointment signals a focus on innovation-driven oversight, which could help balance both progress and public safety. Musk’s appointment to a leadership role in the medical devices sector could accelerate innovation through his focus on cutting-edge technologies like AI, neurotechnology, and automation, potentially reshaping device development and improving patient outcomes.

“AI technologies are becoming integral to a range of industries, and we expect this trend to accelerate globally in the coming years. However, it remains uncertain whether Musk’s approach will truly enable the responsible growth of AI or if it may inadvertently create regulatory gaps that could hinder the technology’s safe and ethical integration.”

Musk’s efficiency-focused mandate includes developing frameworks aimed at streamlining AI compliance while fostering innovation, though there is uncertainty about how effective his approach will be in practice. His appointment reflects the government’s intention to strengthen the US position in AI and technology, which are now viewed as critical for economic growth and national security.

Musk’s Department of Efficiency is expected to provide some regulatory consistency and clear guidelines to help businesses harness AI responsibly. However, concerns remain about whether this approach will adequately balance public trust with the rapid demands of technological advancement.

Kan adds, “The approach aims to promote both security and transparency in AI applications, potentially enhancing consumer protection and supporting industry advancement. By establishing standardised regulations, Musk’s department could reduce the administrative burden on tech firms, allowing them to allocate more resources to innovation rather than compliance.”

Kan concludes, “In an increasingly competitive AI landscape, companies like Google, Microsoft, and IBM have made significant strides, embedding AI into products ranging from cloud computing to healthcare. However, while Musk’s leadership in regulatory oversight is expected to set the US apart by fostering a streamlined approach tailored to the rapid evolution of AI, some remain concerned about whether his strategies will effectively balance innovation with the necessary safeguards.”