Will Overregulation Cost America the AI Race?

National Interest | Asheesh Agarwal

The United States risks losing the artificial intelligence supremacy race to China through excessive domestic regulation and infrastructure roadblocks. Artificial intelligence could raise global gross domestic product by $7 trillion over the next decade while transforming healthcare, manufacturing, defense, and energy sectors. China is currently investing $1.4 trillion in artificial intelligence, generating twice as much power as America, and leading in critical technology domains.

Meanwhile, American policymakers have introduced over 1,800 state-level artificial intelligence bills and more than 300 active data center moratoriums across 44 states. These regulatory barriers threaten to stifle innovation and infrastructure investment. Embracing technological change remains essential to prevent a modern digital divergence that cedes global leadership and authoritarian standard-setting to Beijing.

Comment

State-level opposition to large-scale facility construction undercuts the computational density required for frontier model training cycles. When municipal restrictions constrain high-voltage grid connections, compute clusters migrate to jurisdictions with fewer infrastructural bottlenecks.

Strategic Question for Discussion

How do local data center moratoriums alter the deployment velocity of sovereign artificial intelligence infrastructure relative to state-directed capital allocation?

Local permitting delays disrupt continuous computational scaling by fragmenting supply chains and increasing development costs. This friction contrasts directly with centralised state planning models that prioritise rapid infrastructure deployment over municipal zoning disputes.

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