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5 March 2026

The AI Sovereignty Paradox at Home and Abroad

Michael Froman

First, Washington. Under the second Trump administration, the United States has sought, through a laissez-faire regulatory approach, to ensure that privately owned U.S. firms build the most powerful AI systems in the world. In many respects, this approach is working as designed. Private capital and innovators are doing what they do best in building ever more ingenious U.S.-made mousetraps.

The caveat to this light-touch regulatory environment was always that the government, to enhance its sovereign powers, would demand to become the ultimate power user of AI—co-opting the tools produced by U.S. firms for national security, at scale and on its own terms. In practice, this is proving rather complicated, not least because many in the AI community would like to build products, including those they provide to the military, with built-in safeguards.

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