Matt Mittelsteadt
In late July, the White House released its AI Action Plan. As I noted in part one of this series, policy has pivoted toward a much-needed emphasis on innovation while still striking a relatively balanced tone on risk management. These are welcome shifts. But they don’t excuse the Plan’s largest flaw: a push to combat so-called “AI ideological bias,” paired with an apparent intent to use federal procurement power to influence the biases of the AI sector at large.
Any federal effort to shape the content produced by this emerging medium naturally risks abuse, with profound potential for downstream effects on the national information space. To be clear, AI ideological bias can indeed be a real concern. The inability of Chinese AI exports like Deepseek to comment factually on subjects like Taiwan and Tiananmen Square demonstrates how AI can serve as a vehicle for malign ideological ends. The Deepseek case, however, simultaneously demonstrates the information risks we hazard if the government acts to influence, sway, or outright dictate such AI biases. Here there be policy dragons.
A less obvious risk is the damage this bias fixation could have on the Action Plan’s stated goal of US technological leadership. If Washington uses its purchasing power to steer model “neutrality”—or is merely perceived as doing so—it could blunt the incentives behind America’s AI progress and fuel suspicion abroad that US tech is an instrument of government influence. Before weighing these risks to innovation and global competitiveness, however, we must first understand what exactly the White House has planned to influence AI ideological bias. Let’s dive in.
Regulating AI Ideological Bias
On the same day it unveiled the AI Action Plan, the White House issued a companion executive order, Preventing Woke AI in the Federal Government, to give policy form to its bias-fighting agenda. In brief, this order’s focus is on federal AI procurements. To guard against political biases in government-purchased systems, the order mandates AI be both “truth-seeking,” meaning “truthful in responding to user prompts seeking factual information or analysis,” and ideologically neutral. Operationalizing these directives, it mandates a series of transparency requirements hedged by a range of qualifiers and boilerplate national security exceptions.
On paper, these requirements may seem measured, even modest. In practice, however, the operational text masks a far less measured reality. A major intrinsic challenge of any such effort is determining what “neutrality” means. As I noted in a March public comment on the Action Plan:
“AI bias is an inherent aspect of AI technology. While developers can refine and influence model outputs, completely eliminating bias remains impossible. Modern AI systems rely on probabilistic methods and extensive, complex training datasets, resulting in variability and scale that make exhaustive testing or screening prohibitively expensive and impractical.”
Unfortunately, the Order’s overall “anti-woke” message suggests this is well understood. Despite the non-partisan timbre of its requirements, implementation reality is likely to be distinctly partisan. The Executive Order’s opening paragraphs are explicit that “the most pervasive and destructive of these ideologies is so-called ‘diversity, equity, and inclusion’ (DEI),“ a set of ideological biases the order singles out as “an existential threat to reliable AI.” Such plainly stated political goals are unlikely to be ignored when agency heads exercise their considerable discretion over AI purchases. Systems perceived as left-leaning will likely not be purchased.
Because the economic leverage of federal procurement can shape entire industries, these requirements demand close scrutiny. The Biden administration openly leveraged government contracts to steer AI governance; the Trump administration appears poised to do the same. Indeed, the Action Plan itself suggests White House intentions go well beyond federal systems:
“AI systems must be free from ideological bias and be designed to pursue objective truth rather than social engineering agendas when users seek factual information or analysis. AI systems are becoming essential tools, profoundly shaping how Americans consume information, but these tools must also be trustworthy.”
The message is plain: the White House aims to shape the political biases of the broader American AI sector. With congressional action off the table, the administration’s most potent instrument is the leverage of lucrative federal contracts to advance its bias agenda. Unfortunately, by pulling this policy lever, the White House risks profound consequences for continued US innovation and global competitiveness.
Innovation Impacts
The United States’ AI edge is precarious. Chinese AI may still lag, but only by a matter of months. In this climate, even modest policy missteps can burden the innovation critical to sustaining American advantage. Combining the scale of federal contracts with these ideological bias mandates is a recipe for exactly this kind of drag.
Federal procurement dollars are too substantial for firms to ignore. In July, for example, the Department of Defense awarded Anthropic, OpenAI, xAI, and Google contracts worth $200 million each for AI services. For Anthropic, this single award from a single agency could account for roughly 6 percent of annual revenue. With such unique profit potential, government favor becomes a premium commodity—and innovation-slowing ideological conformity the apparent price of entry.
Even if the Executive Order’s explicit requirements are relatively light, favor-seeking firms will find it hard to ignore the not-so-subtle ideological goals. Hoping to avoid alienating their largest client, companies may start to shift focus from bold algorithmic research, infrastructure expansion, and rapid model releases toward political bias engineering, protracted testing cycles, and the legal vetting needed to avoid compliance pitfalls.
Such ideological tip-toeing can indeed be expected. In 2019, Amazon lost its $10 billion JEDI cloud contract following ideological clashes between the president and Jeff Bezos’s Washington Post. Today’s AI leaders are acutely aware of this precedent—and of the financial risks that ideological missteps can bring. Yet perhaps the greater chilling effect lies in the order’s compliance mechanism: firms deemed uncooperative with its “Unbiased AI Principles” risk not only contract termination but also liability for vague “decommissioning costs.” With these prices placed on ideological missteps, and with most frontier labs tied to federal contracts, broad innovation-chilling conformity can be expected.
The result could be a triple blow. US models could become increasingly skewed, shrinking product variety and leaving consumers with fewer real choices. Innovation might stall, handing the edge in technological leadership to China. And the productivity surge these tools promise might be delayed for years, squandering a once-in-a-generation chance to jolt US productivity out of stagnation.
International Competitiveness Impacts
The potentially more serious risk is to international competitiveness. Here, policy perception can matter as much as reality. Whether or not the order shapes the market, it could still create the international perception that American AI is government-influenced or even a propaganda tool. In time, overseas buyers could regard American AI the way Americans see biased Chinese tech. This is a recipe for lost market share.
This international perception risk should not be discounted. A defining trend in AI today is the growing push for “AI sovereignty.” As OSTP Director and AI Action Plan author Michael Kratsios has noted, “Each country wants to have some sort of control over our [sic] own destiny on AI,” often meaning a desire for models that reflect “the language, culture, tradition or specifics of that country.” The stronger this drive for national “AI ownership,” the more sensitive foreign buyers will be to any suggestion that US AI serves political or cultural agendas.
Recent history offers an omen of the future if such perceptions take hold. After xAI’s Grok was intentionally biased to explicitly favor claims “which are politically incorrect,” leading to an explosion of grossly offensive content, the service was banned in Turkey. The unequivocal cost of intentional political bias was xAI’s market share. To be clear: a foreign government’s opinions mustn’t shape American policy. Still, if this order needlessly biases American tech, further such losses are possible.
These risks may be speculative, but there is reason to believe other elements of US AI policy could accelerate such international perceptions. Released alongside the AI Bias executive order was a companion initiative: Promoting the Export of the American Technology Stack. This plan tasks the Secretary of Commerce with assembling “full-stack AI export packages”—including models, tools, and infrastructure—for aggressive international promotion, backed by diplomatic support and significant government financing. Inevitably, these American AI flagships will have to meet the AI bias order’s compliance standards.
If the White House both actively shapes the political orientation of AI systems while promoting them as national exports, it becomes easier to imagine a future where American AI is viewed as a vessel for American political agendas. The result could be a loss of trust, reduced foreign adoption, and erosion of America’s competitive edge in a global AI race increasingly defined by a respect for sovereignty and cultural alignment.
Conclusion
Uncertainty over the full extent of the White House’s bias-shaping effort remains high. Within 120 days, the Office of Management and Budget will issue implementation guidance that will reveal additional details on the plan’s nature and scope.
Regardless of any further details, a political flare has been cast. In the AI Action Plan, combating AI ideological bias is distinguished as one of the White House’s top three priorities. The federal pocketbook may indeed be used to shape it. That message alone can warp corporate incentives, chill innovation, and invite international suspicion of US AI as a political tool.
In effect, the Action Plan’s aim to fight AI ideological bias could eat away at the innovation and international market access required for its higher-order goal of US AI leadership.In an ever-competitive global AI race, such unforced errors are risks the United States cannot afford.