In the quiet corridors of Washington, an executive order is not moving. It is not being debated on cable news, nor is it the subject of a thousand hot takes on X. It is simply sitting in a drawer, circulating among aides who have learned to avoid the topic in meetings. This is the story of the Trump administration's proposed AI self-regulatory organization, an order that was meant to redefine how America governs artificial intelligence, and which has now become a study in strategic paralysis.
I have spent the better part of a decade watching governance models fail to keep pace with technology. From my work auditing smart contracts in Nairobi to consulting with East African regulators on AI ethics frameworks, I have learned to read the silences in policy documents as carefully as the text itself. This particular silence speaks volumes.
The proposed order was meant to establish a Self-Regulatory Organization for AI—a body modeled on FINRA, the financial industry's self-regulator, but applied to the most transformative technology of our generation. Under this model, AI companies would police themselves, with federal authorization but without direct government oversight. It was a radical departure from the Biden administration's approach, which favored federal coordination, mandatory reporting, and a cautious eye toward safety over innovation.
The core tension here is not about AI at all. It is about whether America believes in the concept of a shared public good or whether it has fully surrendered to the idea that markets, left to their own devices, will produce just outcomes.
Let me trace the moral code behind every token of this policy debate, because that is where the real story lives.
The first resistance comes from within the White House itself. The draft has been circulated, but it has not progressed, and that tells me there is a fundamental disagreement about the legality of the entire enterprise. An executive order cannot simply grant regulatory authority to a private entity. That requires an act of Congress. The legal advisors know this. The policy teams know this. And yet, the order was drafted anyway, suggesting either a lack of coordination or a deliberate attempt to push the boundaries of executive power.
There is also a philosophical split between the national security team, which wants stricter export controls and foreign investment reviews, and the commerce and technology policy offices, which want a lighter touch to encourage innovation. In an election year, these are not just policy disagreements. They are political landmines. The White House has made a calculation: do not spend political capital on a controversial regulatory overhaul when the voters are focused on inflation and immigration.
But here is what the market euphoria misses: the stall is not a failure. It is a choice. And it is a choice with consequences that will be felt far beyond Washington.
The second resistance comes from the technology industry itself, and this is where the narrative gets complicated. On the surface, tech giants support self-regulation because it is softer than federal mandates. But dig deeper, and you find a profound ambivalence. A self-regulatory organization led by the biggest players in AI would look, to antitrust regulators, like a legalized cartel. The standards would be written by OpenAI, Google, and Meta, and smaller companies would be forced to comply with rules they had no hand in shaping. There is also the question of liability. If you participate in regulation, you become responsible for the outcomes of that regulation. That is a risk that most companies would rather avoid.
I have seen this dynamic play out in the blockchain world. When I was involved in the ZEIP-20 standardization working group, we spent six months debating edge cases in token transfer logic. The technical arguments were real, but beneath them were questions about who gets to set the rules and who gets excluded. The same dynamics are at play here, only the stakes are higher. AI is not just a financial instrument. It is a technology that will shape how we work, how we learn, how we govern ourselves.
The third resistance is the quiet one. It comes from the states. While the federal government stalls, California has passed SB 53, requiring safety testing and transparency reports for large AI models. Colorado has enacted the nation's first comprehensive AI consumer protection law. New York City has implemented its AI hiring audit law. At least 40 states have introduced AI-related legislation. The federal vacuum is not empty. It is being filled, piece by piece, by a patchwork of state rules that will be nearly impossible to harmonize later.
This is the point where I have to offer a contrarian perspective, because I believe in testing even my own convictions. The stall might not be entirely bad. In fact, it might be the most honest thing the federal government has done in years. By refusing to rush a flawed framework into existence, the White House has inadvertently created space for a more thoughtful conversation about what AI governance should look like. The problem is that no one is having that conversation. The silence is not contemplative. It is avoidant.
And there is a deeper issue. The proposed order was likely to include a preemption clause, restricting states from creating stricter rules than the federal standard. That is a direct attack on federalism, and it would have faced immediate legal challenges. The stall may be a strategic retreat from a losing battle, not a sign of thoughtful deliberation.
Meanwhile, the European Union's AI Act came into effect in August 2024. It is the world's first comprehensive AI regulation, and it is already becoming the de facto global standard. This is the Brussels Effect, and it is happening in real time. American companies that want to operate in Europe will have to comply with EU standards, which means those standards will eventually shape their products everywhere. The United States is not just losing its voice in the global conversation. It is choosing to be silent.
I think about the African AI-Blockchain Ethics Charter that I co-authored in 2026, and the months we spent consulting with farmers, technologists, and policymakers. We did not have the luxury of an executive order. We had to build consensus from the ground up, and we learned that the process of building that consensus is itself a form of governance. The American approach, which treats regulation as either a burden to be avoided or a tool to be wielded, misses this entirely.
We are building libraries where others build empires. The question is whether America still remembers how to build libraries.
So what does this mean for the industry? In the short term, nothing changes. Companies will continue to develop AI without federal oversight, and the innovation engine will keep running. But in the medium term, the compliance costs will rise as state laws multiply. In the long term, the lack of a federal framework will mean that American companies are playing by European rules, and the global standard will be set in Brussels, not Washington.
The signals to watch are clear. If the executive order is revived after the election, we will know the stall was a political calculation. If it remains dormant, we will know the resistance is structural. The release of California's SB 53 implementation details will set the ceiling for state-level regulation. And the EU's enforcement of high-risk AI obligations in 2025 will show us how much leverage Europe actually has.
I am listening to the silence between the blocks, and I hear something that worries me. It is the sound of a nation that has lost faith in its own institutions, and that has decided, perhaps unconsciously, that the market will solve problems that are fundamentally political. But markets do not solve problems. They allocate resources. And the resource we are misallocating right now is trust.
There is still time to change course. But time is not infinite, and neither is the patience of the people who will live with the consequences of this inaction. The moral code behind every token of this debate is a simple one: governance is not a constraint on innovation. It is the foundation on which innovation can flourish. If America cannot remember that, the rest of the world will build the future without it.