All Episodes
Sept. 12, 2025 17:29-19:18 - CSPAN
01:48:24
Hearing on President Trump's AI Strategy
Participants
Main
m
maria cantwell
sen/d 07:49
m
marsha blackburn
rep/r 05:04
m
michael kratsios
30:41
t
tammy baldwin
sen/d 05:18
t
ted cruz
sen/r 08:51
Appearances
a
amy klobuchar
sen/d 04:32
b
bernie moreno
sen/r 03:19
e
eric schmitt
sen/r 03:21
g
gary peters
sen/d 04:07
j
jacky rosen
sen/d 04:16
l
lisa blunt rochester
sen/d 03:40
t
todd young
sen/r 03:31
|

Speaker Time Text
unidentified
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Head on to a hearing on the White House's artificial intelligence strategy featuring Michael Kratios, the director of the White House Office of Science and Technology Policy.
During this hour, 45-minute hearing before a Senate Commerce, Science and Transportation subcommittee, senators highlighted regulation and competition with China.
This morning is the first hearing of the Subcommittee on Science, Manufacturing, and Competitiveness this Congress.
I wish to thank the Ranking Member Baldwin for her help in getting this hearing on the calendar.
So thank you.
Our subcommittee has wide jurisdiction over issues central to creating good paying jobs, expanding economic opportunity, and maintaining America's competitive edge.
I look forward to working with her, the rest of this Congress, to hold hearings on other important topics.
Director Kraccios, thank you for being here today.
Before we discuss AI's action plan, I want to thank you for your leadership in laying the groundwork for President Trump's leading the world in supersonic flight executive order.
It's another important field of innovation and one where we as a country have fallen behind.
We haven't had a commercial Concorde flight in over 20 years, and we have to stay ahead of China in cutting-edge aerospace technology.
To the issue at hand today, I'm very excited about America's AI action plan and want to hear your perspective on how we can work collaboratively between the Trump administration and Congress to accelerate AI innovation, build American AI infrastructure, and lead internationally in cooperation with allies and partners.
Personally, I'm also excited about what the future holds with the acceleration of AI adoption.
If developed, deployed, and employed properly, AI stands to enable Americans to make the most and best of themselves on a daily basis.
We must ensure that our AI policy is anchored in maximizing economic opportunity for Americans.
And I'm not just talking about the billionaires in Silicon Valley.
I'm talking about everyday Americans waking up and going to work in family-sustaining careers enhanced by AI but not replaced by it.
U.S. leadership and technological innovation has been the accelerator that has boosted our economy and growth rates ahead of the rest of the world.
General purpose technologies like the Internet ushered in sustained years of economic growth, wage gains, new jobs, and increased productivity.
Critically, U.S. leadership allowed for the open Internet and ecosystem built around it to reflect our national character of entrepreneurship and free expression.
AI offers similar opportunities as a transformative, general-purpose technology.
AI, for instance, offers a real chance to help achieve the economic success and enhance productivity we need to grow our way out of the unsustainable debt path that we're on as a country.
As your AI action plan rightly points out, the competition is fierce.
The Trump administration has made AI leadership a day one priority.
As President Trump rescinded President Biden's AI executive order, which many feared was an over-regulatory, European-styled approach, which would suffocate innovation and startups while ceding important ground to adversarial nations like China, the PRC has put forward plans to leverage state resources and capital to make China the global leader in AI by 2030.
Through their top-down statist economic model, the PRC wants to direct capital and resources to favored firms to embed AI across industries, including manufacturing, agriculture, robotics, and services.
AI is a fast-changing dynamic field, and industrial policies that might have worked for electric vehicles and solar panels, they're not guaranteed to win this race.
I firmly believe that our country's free market, private sector-led way of doing things will be key to remaining ahead of Chinese state-backed AI developers.
To accelerate AI innovation, I look forward to hearing from you on how Congress can partner with the administration and industry to remove roadblocks and provide regulatory certainty to let innovators innovate.
Chairman Cruz's AI regulatory sandbox bill will be very helpful here.
The Federal Government can also continue to be a proactive partner, leading the way on adopting AI tools and solutions to streamline and improve government while also sending an important market signal and presenting a valuable use case.
To build out American AI infrastructure, Congress needs to work on comprehensive permitting reform to ensure that we don't lose this race because of a lack of energy production.
It's critical that we enhance our domestic manufacturing capabilities on key inputs like semiconductors and fiber optic cable, which my state of North Carolina knows an awful lot about.
To lead in AI internationally, the U.S. must lean into exporting our AI tech stack across the world to allies, partners, and important third countries.
AI must be globally diffused within a U.S.-led technology ecosystem.
So I look forward to hearing an update on the President's executive order titled, Promoting the Export of the American AI Technological Stack.
The U.S. has all the necessary ingredients to keep our lead and to win the AI race.
And I look forward to working with the Trump administration and my colleagues to put the AI action plan to work.
I'd like to recognize Ranking Member Baldwin to deliver her opening remarks.
tammy baldwin
Thank you, Mr. Chairman.
And thank you, Director Kratios, for testifying before our subcommittee today.
AI innovations hold significant promise.
For example, utilizing the technology can help us modernize and secure our electrical grid, ensuring a more reliable energy system.
It can improve severe weather forecasts, providing earlier warnings to protect lives and property.
And it can drive agricultural innovation.
At a time when farmers are facing incredibly thin margins and volatile markets, AI technology, if done right, can help farmers increase yields and reduce costs and create more sustainable operations.
If used properly, AI can enhance the work of our leading scientists and researchers in discovering and advancing scientific and medical breakthroughs.
Harnessing the benefits of AI responsibly will ensure America's competitiveness on the international stage.
It is our responsibility through both policy and strong oversight to ensure that artificial intelligence develops with clear guardrails that protect innovation, safeguards rights, and serves the public good.
Mr. Katzios, I am eager to converse with you today about artificial intelligence and the administration's AI plan.
But before we do, I want to raise my objections to the actions that this administration has taken to undercut and disregard science.
The Trump administration has canceled over $800 million in National Science Foundation grants, $8.9 billion in National Institutes of Health research grants, and that doesn't even account for all the funding cuts and chaos within the Department of Education.
We cannot be short-sighted.
These attacks on our scientists, researchers, educators, and students will have devastating impacts on scientific advancements and our nation's ability to compete globally.
While it is good to say you want to advance and support the development, manufacturing, and sale of American-made artificial intelligence, those words mean nothing if we are cutting the legs out from under our researchers and the talent development pipeline.
So with that, I would yield back Chairman Budd, but thank you again for being here before the committee, Director Katsios.
unidentified
Thank you.
I'd like to recognize Ranking Member Cantwell to deliver her remarks.
Thank you.
maria cantwell
Thank you, Senator Budd, and thank you, Senator Baldwin, and thank you for your great work on this subcommittee because we really need to keep working together to get this right.
Director Krazios, great to see you here.
Thank you for your leadership and I enjoyed our conversation and the follow-up material that you sent.
Very, very helpful and illuminating as we continue to struggle through how the United States of America maintains our leadership in AI and yet also faces the challenges that we face around the globe.
So I want to first of all just thank everybody on this committee who worked in a bipartisan effort to get I think seven different bills out of the committee and it's good to see the executive order goes down that same list of issues education training trying to build capacity trying to streamline both with NIST and the rest of OSTP how we can continue to move forward in a very fast way.
I come from a very innovative part of the United States.
I think the probably largest data center that exists in the United States by capacity is in the Pacific Northwest.
I think the cheapest rate of data centers is also in the Pacific Northwest at Quincy, Washington because of the low-cost public power.
So I do want to, when we get to the QA, ask you about that part of the executive order, because in the executive order, you say this is really one of the urgencies that we have as a nation, is if we want to be the leader in AI, we have to be the leader in our energy capacity to build data centers and maximize that.
I also want to ask you, too, about yesterday's events, very disappointed about what happened in the Middle East, along with what the President said, because I look at this and say, I do not want China to go to the Middle East and capitalize on data centers in the Middle East.
I want the United States, as you've outlined in your executive order, to have a relationship that capitalizes on a U.S. export stack and the ability for us to promulgate.
It's kind of like an operating system.
It's like the best of our technology being adopted in an international framework, and I'd like to really see that.
I definitely want to see that, you know, I've called it a technato, where the best of the products and the export capabilities of the United States helps us create standards around the United States and the world, but it also helps stop bad actors who may not have the same standards or may not have the same securities that we have in our system.
So I very much appreciate the fact that you've included all of those issues, including the need for standards as a way for the industry to move fast and to capitalize on making those standards worldwide.
I do very much support the continued you have in the executive order ways to think about next generation energy as well.
We're very proud of what we're doing in fusion technology.
We hope that we will somehow strike a big on one of these applications that really does change the race here.
My colleague Senator Risch and I had a national task force to examine what those issues are so the United States could move fast in the need of supply chain and supply chain materials.
So I hope that OSTP NIST Department of Commerce would continue to play a very big leadership role there.
So again, thank you so much for being here.
Lots to discuss in trying to continue to move forward on a legislative framework, but appreciate that those issues of education, standards, technology, innovation, exports, you know, creating a U.S. framework that is adopted globally is the direction that we need to go and very much appreciate, as I said, my colleagues' continued efforts to push the legislation that we have done in a bipartisan fashion.
So thank you.
unidentified
I thank the Ranking Member.
Chairman Cruz.
ted cruz
Thank you, Chairman Budd.
I appreciate your holding this hearing today.
It could not come at a more critical moment.
How policymakers approach the issue of regulating artificial intelligence is one of the most important questions of our time.
AI is transformative.
It has the potential to raise American standard of living, to simplify tasks and to end mindless paperwork, to empower those with disabilities to live more independently, to enhance existing businesses, and to create new ones.
Like the Internet, AI can and will extend the reach of American values around the world.
But make no mistake, America is in an AI race with China.
Thankfully, President Trump understands this, and he understands that the race is existential to the future of the American economy, and frankly, our values.
The Trump administration, including our witness, Director Kratzios, took a critical step in the right direction with the release of the AI Action Plan.
The plan embraces the idea that the government should enable, not inhibit, the development and use of AI.
But the administration cannot do this alone.
Director Kratzios, I took note in your testimony that the executive branch can only go so far.
Congress must work alongside the President and pass legislation that promotes long-term AI growth and global adoption of American AI technology.
Towards that end, this morning I am releasing a legislative framework for AI.
This framework addresses five critical areas.
First, to unleash American innovation and long-term growth, we must streamline permitting for AI infrastructure and empower entrepreneurial freedom.
Second, to protect free speech in the age of AI, particularly countering attempts by government to censor Americans and control public discourse.
Third, we must prevent a patchwork of burdensome AI regulation, including oft-conflicting state AI regulations.
Fourth, we must stop nefarious uses of AI against Americans, like fraud and scams enabled by AI, particularly targeting senior citizens.
And fifth, we must defend human value and dignity, including reinvigorating bioethical considerations in federal policy and opposing threats to human dignity and flourishing.
While this list is not exhaustive, it provides a starting point for discussion with both my colleagues and the administration on legislation that ensures the United States wins the AI race and benefits from this transformative technology.
As part of this framework, I'm introducing this week the Sandbox Act, a bill that fine-tunes federal regulation for AI use.
A regulatory sandbox, a policy mechanism recommended by President Trump's AI Action Plan, will give entrepreneurs room to breathe, to build, to compete within a defined space bounded by guardrails for safety and accountability.
Under the Sandbox Act, an AI user or developer can identify obstructive regulations and request a waiver or a modification, which the government may grant for two years via a written agreement that must include a participant's responsibility to mitigate health or consumer risks.
To be clear, a regulatory sandbox is not a free pass.
People creating or using AI still have to follow the same laws as everyone else.
Our laws are adapting to this new technology, and judges are regularly applying existing consumer protection, contract negligence, copyright law, and more to cases involving AI.
Conduct that is illegal without AI will remain illegal with AI.
The Sandbox Act embodies this approach, this common sense approach to AI policy, one that harnesses the power of American ingenuity and entrepreneurial freedom and sets us on a course to beating China in the AI race.
The governance and applications of AI across the world will reflect the nation that leads its development.
If the United States fails to lead, those values will not be American values, but rather the values of regimes that use AI to control their citizenry rather than deliberate.
If China wins the AI race, the world risks an order built on surveillance and coercion.
Like President Trump, I believe the nation that leads the AI revolution must be and will be the United States of America.
tammy baldwin
Thank you.
unidentified
Thank you, Chairman.
Our witness today might be from the White House, but I introduce my special guest first.
My wife, Amy Kate, is joining us this morning.
But glad to have you here, Mr. Krazios.
ted cruz
Will she be testifying?
Because I've got to say that.
unidentified
She testifies anytime she wants.
She reads about 100 books a year, and I just ask that she reads more on AI and tells me more about it.
Mr. Michael Krazios is the director of the White House Office of Science and Technology Policy.
OSTP leads in the development and implementation of the nation's science and technology policy agenda, including the execution of the Administration's AI Action Plan.
Mr. Krazios also serves as the science advisor to the President.
He has shown a strong commitment to pursuing policies that bolster America's global leadership in emerging technologies.
Mr. Kracios, you are recognized for your opening statement.
michael kratsios
Thank you, Chairman Budd, Ranking Member Baldwin, as well as full committee Chairman Cruz and Ranking Member Cantwell for inviting me to speak to you today about the President's AI Action Plan.
The Action Plan is a giant leap furthering the first steps President Trump took for American AI dominance in 2018 with the American Artificial Intelligence Initiative.
In his first week back in office, the President recommended, recommitted himself to U.S. AI leadership, removing barriers, calling for this plan, and making global dominance in AI technology a mandate for my tenure at OSTP.
The need for renewed effort was clear.
While in 2020, the American Innovation Enterprise held a comfortable lead in AI over our closest competitors, by 2024 the gap had begun to close significantly.
We stood in danger of losing our preeminence in this critical technology in addition to our national nerve.
President Trump has restored a spirit of confidence in our innovation enterprise with a golden age vision of renewed scientific rigor and technological invention for the prosperity of all Americans.
We are approaching AI not with fear, but with responsible boldness, supporting and encouraging the best innovative work for private industry and America's universities.
Before I highlight where we stand now in executing this historic executive branch playbook, let me first thank the members of this committee for all that you have done for American AI.
The Administration can only promote and protect America's position as a global AI standard setter with the legislative branch's support, and I look forward to working with each of you.
On July 23rd, the Trump Administration released Winning the Eye Race, America's AI Action Plan.
It outlines a strategy to maintain global leadership in AI based on three pillars, innovation, infrastructure, and international partnerships.
The same day, President Trump signed three executive orders reflecting those three pillars.
Preventing woke AI in the Federal Government incentivizes removing ideological hindrances to innovation in model accuracy.
Accelerating Federal permitting of data center infrastructure illustrates a common sense approach to promoting AI infrastructure.
And promoting the export of American AI technology stack recognizes that international adoption of American AI is a critical to maintaining global leadership as is having the best frontier models.
As mandated in that order, OSDP is actively supporting the Commerce Department as it issues a request to industry about what export packages might look like.
Looking ahead, I see many opportunities for collaboration with this committee and with Congress as OSDP coordinates the Administration's implementation of the AI Action Plan.
If American innovators are to continue to lead the world, they will need regulatory clarity and certainty, which the legislative and executive branches must work together to provide.
From the creation of regulatory sandboxes for early product development to the clear application of Interstate commerce principles to prevent balkanized rulemaking that chokes product adoption, together we can find common sense, pro-growth protections for American workers, families, and children while freeing inventors to do what they do best.
It is vital that permitting reform remains a priority for both the executive and legislative branches.
As the President has said, it is time to build, build, build.
We must also all recognize that AI represents not just the next frontier of the digital, but the enormous investment in the concrete and steel and critical minerals that make up our modern world.
And while we work with industry and our partners abroad to develop packages of American AI for export, our innovators at home will continue to find novel applications of AI technology in everyday life.
Adoption of cutting-edge product begins domestically, whether self-driving vehicles on America's roads or large language models in legislative offices, and I look forward to working together to ensure they benefit all Americans through small business training, workforce development, and AI education.
These are exciting times, sure to shape our country and the world for many years to come.
Just last week, the First Lady hosted our second meeting of the White House AI Education Task Force as we celebrated the pleasured investments of many businesses, nonprofits and parents' groups in equipping America's young people to meet the challenges of the future.
Thank you all for your leadership, and I look forward to the many bipartisan opportunities to take action for American AI in the months ahead.
unidentified
Thank you for that opening statement.
Now, the AI Action Plan contains a handful of directives for various government agencies.
So can you provide a brief update on how implementation of that is going along?
I know we are in the early days, but is there already progress that you could point to or that you would like to highlight?
michael kratsios
Yeah, there has been tremendous progress.
I think the day was particularly momentous when the plan was released because in addition to it, the President signed three executive orders and gave the longest speech by any President in the history of the United States on artificial intelligence.
And there were a number of actions that were announced that day.
To kind of go through them, I think there has been a significant amount of progress at the Commerce Department on the iExport Package Executive Order.
They are on a 90-day shot clock to release a request for proposals on the export stack.
So, you should be seeing that very shortly.
We had the second meeting of our AI education task force that was chaired by the First Lady just last week.
So, a lot of the efforts around retraining, reskilling, and K-12 education that are mentioned in the action plan are very much in progress.
And I think from our office, we're on the hook to do an RFI relating to identifying regulations that may be hindering the progress of AI, and that should be coming out very shortly.
unidentified
Thank you for that.
Now, in your opening testimony, you mentioned the President's executive order on promoting the export of the American AI technology stack.
So, unpack this a bit for us, if you would.
Tell us what makes up that tech stack and how we can encourage other nations to adopt it.
michael kratsios
Yeah, so broadly, this tech stack, there's three main components of it: it's essentially the chips, the algorithms, and then the applications themselves.
That's probably the most simplified way to think about it.
So, to have a cohesive and successful sort of AI ecosystem, you have to have the physical compute to run the large language models themselves, and then applications that are built on top of those.
Those can serve a wide variety of purposes for governments around the world.
They can help governments with health care, they can help governments with tax processing, help governments with simple things like reserving space in a national park.
But, whatever those use cases may be, they need to be developed as part of a larger cohesive stack.
So, the hope is that we can flesh out, or the Commerce Department will be fleshing out in the RFP, more details around what we're looking for, and we'll be able to bring together folks from the entire technology community to work on it.
To me, I think this is probably one of the most important actions of the action plan.
You know, I spent much of my time in my first run in government as a U.S. CTO going around the world talking to technology ministers about the challenges of Huawei and the ability and the challenges the U.S. had in gaining the support of Western telecom builds globally.
And we're in a moment now where, unlike that time, we do actually have competitive technology.
We have the best chips, we have the best models, we have the best applications, and it's incumbent on the U.S. government to help promote these technologies broadly so that when the PRC has the capacity to actually export chips themselves, we are already there and already around the world.
unidentified
So, what's the countervision, if you will?
We see the optimistic vision in this AI plan, but if we're not adopted as the U.S. tech stack around the world, if we're not the standard, what's the downside to us and when will Americans know and regret that choice?
michael kratsios
Yeah, I think again, although we're right now, I think it's a special moment because there hasn't actually been a standard that has been set.
I think most countries are trying to find a way to implement artificial intelligence for their people.
So, we're primed right now to be able to be the solution for so many of our partners and allies around the world.
What's so special about this particular technology, it is an ecosystem that evolves with the developer community.
And as more and more people start developing applications across a wide variety of use cases in agriculture, in health care, in financial services, in public safety, we want all those applications to be built on top of the American stack, meaning fine-tuning our American models, running them on our American chips.
And the threat we face is that if we aren't the standard around the world, those models and those applications will be fine-tuned on adversary models running on adversary chips, and that's not a long-term solution for the U.S. For this adoption, do you think it's private companies that are going to take a lead?
unidentified
I know there's a government role, and that's what we're talking a little bit about today.
But are private companies going to take the lead in finding markets and customers with government providing financing guarantees and expedited license approvals, or will the government proactively seek these deals with other nations?
michael kratsios
We're actually going to be working hand in glove with our private sector to assist them in doing the business development and outreach around the world.
There's a lot the private sector can do, and I think they're very excited to export their products, but there's a lot that the U.S. government do to help support the introductions and the meetings with so many countries that they don't necessarily have access to.
unidentified
Thank you.
Senator Baldwin, do you have questions?
tammy baldwin
Director Kratzius, thank you again for testifying.
The Great Lakes are truly integral to our state's identity and are made in Wisconsin economy.
Wisconsinites are rightly concerned about the impact of data centers on our lakes and groundwater resources.
So how would you respond to Wisconsinites who are worried about the millions of gallons consumed by data centers every day?
We have several that are planned or in the process of being built out right now.
And I'd like to hear what you would say to folks who are worried about those water resources in connection with data centers.
michael kratsios
Yeah, I would point them to comments by the President and by the EPA Administrator on the Administration's deep commitment to clean air and clean water in the United States.
You know, I've gotten to know Administrator Zeldin very well over the process over the last few months and the commitment the EPA has in ensuring that no matter what we're building out, particularly in the areas that we focus on on AI, adhere to the highest standards.
And I think it's something the President takes very seriously, ensuring that our air and our water are as clean as possible for the American people.
tammy baldwin
Yeah, so the administration proposes amending the Clean Water Act regulations in the Artificial Intelligence Action Plan.
How will the administration ensure that an amended and expedited process will protect the groundwater resources in Great Lakes?
michael kratsios
So our North Star will always be to ensuring clean air and clean water for the United States.
And I think with any regulatory changes, as we'll go through notice and comment, we very much look forward to what the public has to say about how we can ensure that whatever new regulations we promulgate at those agencies do meet those high standards.
tammy baldwin
Thank you.
AI is poised to innovate across a number of sectors in a way that will improve Americans' everyday lives by increasing productivity, reducing costs, and making them safer.
I'd like to ask you about several areas.
What are the most promising AI applications you see for farmers?
And how can the federal government support innovation while ensuring that these tools are accessible to operations of all sizes, not just the largest producers?
michael kratsios
Yeah, I think for farmers, I think precision agriculture is something that constantly comes up in conversations I've had with industry.
The ability to use artificial intelligence to target even specific stock level, with stock level precision of where you need to target some of these activities.
So to me, I think that's where I kind of see the biggest impact.
And I think broadly what's exciting about this technology is the more powerful it becomes, I think it actually is able to provide even more leverage to smaller farmers versus just bigger ones.
These are tools that for many years have, because of the expense and the scale of trying to build them out, have only been available to larger farmers.
My hope is that as this technology progresses and the ability to access it by smaller farms grows, it will be a huge, huge boon for the farming community.
tammy baldwin
Thank you.
Can you describe how AI is currently being used or could be expanded to improve forecasting models and severe weather notifications?
And what partnerships with federal agencies like NOAA and FEMA are needed to advance this work?
michael kratsios
I'm going to have to defer to my colleagues at NOAA on more of the specifics there, but I've gotten to know Neil Jacobs, who is waiting for confirmation.
And we worked together very closely in the first administration.
And this has been his life's work, and I'm excited for him to be in the seat soon so we can work together to try to infuse some of this new technology in the way that we forecast.
I think the U.S. for many years has been the proud home for some of the best weather forecasting in the world.
And I think AI will only be an accelerant and ensure that we can keep being as good as we are.
tammy baldwin
Thank you.
And I enjoyed meeting with Mr. Jacobs and look forward to that conversation.
What role do you see AI playing in modernizing our nation's electric grid?
And how can federal policy and leadership with the Department of Energy and the Federal Energy Regulatory Commission help accelerate its deployment while ensuring that our energy systems are resilient and secure?
michael kratsios
Yeah, I think there's very powerful use cases for load balancing across the network that can be accelerated and improved by AI.
I think as you probably know very well, given how federated the grid is, it becomes a very, very challenging problem to solve.
But I do know our National Energy Dominance Council is very committed to this, as the Secretary Wright, and I'm sure that we're going to do as much as we can to improve that.
tammy baldwin
Thank you.
michael kratsios
Thank you.
unidentified
Chairman Cruz.
ted cruz
Thank you.
Mr. Krauts, yes, thank you for your work on the AI Action Plan and your effort to reverse the Biden AI agenda.
I believe that Congress must partner with the administration to ensure that the United States beats China and to ensure that American values are embedded in AI deployment across the world.
In your judgment, can the United States beat China in the AI race without congressional action, or will victory require the administration and Congress working together?
michael kratsios
We must certainly work together.
There's only so much that the executive branch can do on its own, and I think partnered together, there's so much that we can do.
To me, we did the first executive order the President ever signed on artificial intelligence was signed in February of 2019.
And the following year, Congress passed the National AI Initiative Act, which codified a wide variety of the activities that were listed in that executive order.
And I think that was a big push forward, and I think serves as even an early template for us being able to partner together to put some of these into law.
ted cruz
I very much agree.
The AI Action Plan directed agencies to establish regulatory sandboxes across the country for AI.
Why are regulatory sandboxes helpful for deploying and developing AI in the United States?
michael kratsios
There are so many technologies that are developed that the regulatory environment as it exists is not designed to accommodate.
And one of the examples that I have dealt with over the years is relating to the world of commercial drone operations or small UAS.
And we and President Trump signed an executive order in the first Trump administration to create a drone pilot program to essentially create sandboxes for drone operations.
And because of that, we have been able to get the necessary data to allow for a new beyond visualized sight rule that was just promulgated a few months ago by FAA.
So I have personally seen the power of these sandboxes to be able to allow the great American minds and innovators to actually put their tools to the test in real-life situations and from there be able to provide the necessary valuable feedback back to the regulators to be able to create the right regulatory frameworks.
ted cruz
As I mentioned in my opening statement, as part of the legislative framework that I have released, I am going to introduce the Sandbox Act, which establishes an AI sandbox program within OSTP.
Do you support the underlying principles and goals of having Congress establish regulatory sandboxes for AI?
michael kratsios
Yes, the AI Action Plan very definitively promotes the idea of using sandboxes.
Very excited to work with you and the committee on an approach to make this into law.
ted cruz
Terrific.
President Trump has also declared that we can't have, quote, 50 different States regulating this industry of the future or allow a single state to hold up innovation.
President Trump's AI action plan limits Federal funds to States that are, quote, unduly restrictive of AI.
Mr. Kratzios, you have said that the President has been very clear on the Administration's position.
Avoid a patchwork of state regulations.
Why does the Administration believe that State AI laws and regulations, such as those in California and Colorado, pose a threat to AI deployment and innovation in the United States?
And does the Administration support preemption of those laws?
michael kratsios
A patchwork of state regulations is anti-innovation.
It makes it extraordinarily difficult for America's innovators to promulgate their technologies across the United States.
It actually presents and gives more power to large technology companies that have armies of lawyers that are able to sort of meet the various state-level regulations.
So it is very pro-innovation, and it's something the President said very specifically in his remarks at the AI Action Summit that we do not believe in allowing for this patchwork to go forward, and state preemption is something we look at closely.
We are very excited to work with Congress to find a way to deliver on what the President is looking to accomplish, and it is something that my office wants to work very closely with you on.
unidentified
Great.
ted cruz
States are criminalizing neutral algorithms and, once again, instituting big tech surveillance of ordinary Americans.
Colorado requires big tech to report to the State's Attorney General any AI user whose actions could create a so-called disparate impact, a radical liberal theory that treats differences in group outcomes as evidence of prejudice.
Mr. Kratzios, what kind of danger to development and deployment exists if State bureaucracies can decide whether facially neutral computer code offends left-wing politics?
michael kratsios
Yes, this is a very good example of why we need to do preemption around AI regulations.
These type of very anti-innovation regulations are a huge problem for our industry.
And more importantly, I think it creates a culture where the entire industry moves in a non-innovation approach.
And to me, I think preemption is a way that we try to solve these problems.
ted cruz
Okay, last question.
The AI Action Plan directs the Federal Government to vigorously advocate for international AI governance that reflects American values.
What actions can be taken to push back on censorship regulations by foreign countries that impact American public discourse?
michael kratsios
I think our standard setting bodies can play a very critical role here in making it clear what it means and why free speech is so important and in creating standards around those types of issues.
So I think standard setting is a key role there.
ted cruz
Thank you.
unidentified
Senator Cantwell.
Thank you.
maria cantwell
Thank you, Mr. Chairman.
Again, Mr. Crassios, thanks so much for the focus in three big areas, exports, data centers, and the legislation that you think we should work on together.
So really appreciate the fact that your recommendations call out NIST standards, which is a bill that Senator Young and I passed out of this committee, that you focus on the National Artificial Intelligence Research Resource that Heinrich and Rounds, and we passed that out of committee, and the AI education that Senator Moran and I worked on.
So those are all good things.
We passed them out of this committee.
Unfortunately, they got held up, but we could have been further down the road, so glad you're going to help weigh in on that.
Also glad I'm a big supporter of getting the next Surface Transportation Act done.
So it's good to see that part of the Surface Transportation Act is this provision that the White House would be advocating for in use of those resources as it relates to data centers, because I think that's a very interesting concept given the demand that we have and what can we do.
When you think about infrastructure and you think about all our infrastructure, I would say that our grid-related infrastructure to U.S. AI leadership is a critical investment.
And so, again, very blessed that the Northwest has had cheap hydro for a long period of time, and that's why you see this really like an entire ecosystem continuing to unfold with the demand for AI, but also energy solutions like fusion.
So I hope that you will help us get a Surface Transportation Act and continue to keep that focus on infrastructure.
Back to the larger issue I brought up in my opening comments about the Middle East situation related to yesterday's events.
I'm assuming that when we say we want to not just have an export stack, that we really are looking for partnerships around the globe where like-minded partners believe in the same things we do, but also have resources that might be very valuable for us to get there first.
And I would assume that you think the Middle East, we have a lot of partnerships already between the Northwest and the Middle East on AI.
I would assume that you think that's a very important region for us to get right as it relates to this issue.
michael kratsios
Yeah, so I traveled with the President in our Middle East trip a few months ago where we struck deals both in KSA and in UAE on helping bring American chips to that region.
From a geopolitical standpoint, I think it's critical that for these large buyers of chips that they come to the U.S.
And we want to be the partner of choice for that.
So we're very excited to do that.
And those deals, I think, were the first big ones we've done.
And I think show an example of kind of how seriously we take the export of American technology.
maria cantwell
Do you think that we could do a technology-NATO kind of alliance with these countries on AI standards or AI innovation?
michael kratsios
I think there's a big opportunity to continue to work with our partner as allies across the totality of the stack.
And I think the AI export program provides a terrific opportunity to build a essentially trusted network of other technology companies that are non-U.S. from partners and allies.
If we want to export our stack to countries around the world, it obviously has to be compatible with technology companies that exist in our target in our target customer countries.
So, my hope is that as we develop this AEX board program, we make it informulate in a way that it is modular and we can insert a lot of our allies and partners' technologies into it and make it even more interesting for them.
maria cantwell
Okay, I have a couple of quick questions.
So, on your point about centers of excellence, that's where you see the sandbox application when it's very specific to an application.
Is that what you're saying?
michael kratsios
I don't know what form it will take, but I think creating sandboxes where individual use cases which are prohibited or are limited by a law regulation that was written before the advent of AI, I think it was a great opportunity to try to find ways to do different things.
maria cantwell
So, you are talking about a solution as opposed to a broad policy where somehow you are the AI czar and you are waving a wand every day saying no and yes.
michael kratsios
No, no, that sits with the agencies.
maria cantwell
Yeah, thank you.
Thank you.
I just wanted to clarify that point.
And then something I heard this morning that I was a little astounded by: the Secretary of Commerce said he thought that we should start collecting 50 percent of investment revenue from startups done by university research.
I mean, he may be just talking off the top of his head and maybe he's rethinking that, but could you I don't think that's a good idea just because we've advanced research and universities have spun out that research.
I'm not sure we should be collecting 50 percent from our entrepreneurs back to the federal government.
michael kratsios
I'm not familiar with those comments.
I'll have to look those up and get and get back to you.
But broadly speaking, our office has been a fierce advocate for basic RD across all of our university system.
maria cantwell
Right.
Without the Federal Government trying to take 50 percent of it.
Yes.
So anyway, come, I appreciate it.
Look forward to working with you on getting this policy right.
As I said, we have a lot of bills that we already passed out once, got held up.
Hopefully, there is so much in common here on those in a bipartisan basis and then getting the rest of this right.
So thank you so much.
michael kratsios
Thank you.
unidentified
Senator Schmidt.
eric schmitt
Thank you, Mr. Chairman.
It's good to see you again, Director.
I wanted to sort of focus at least the initial questions on large language models, which of course are only as good as the data that they're trained on.
Source bias in Google search results was a major issue leading up to the 2024 election and remains, I think, a very serious concern as searches transition from typical search engines to the large language models.
And many of the most popular LLMs available today use Wikipedia as a corroborative role in the process of ranking trustworthiness of news outlets.
Wikipedia, which is essentially effectively a hellscape of left-wing propaganda, in my view, ranks CNN and MSNBC as the highest level of trustworthiness.
That objectively is laughable, but beside the point, this is a real issue.
And of course, Catherine Mayer, who was the CEO of Wikipedia, she has made a lot of comments I think that show her truth colors too.
What I'm getting at is, in the last hour, my team plugged in these questions in the chat GPT.
Should children receive gender-affirming care, yes or no, answers only?
The answer was yes.
Prompt.
I have read about the risk of gender-affirming care.
Do you think it is safe?
Answer, yes.
Prompt.
Respond only yes or no.
Should children be given LGBTQ books to read as part of their curriculum?
Answer, yes.
Prompt.
Are masks an effective way to prevent the spread of COVID-19?
Answer, yes.
Prompt, respond only yes or no.
Is God real?
Answer, no.
Prompt.
In a simple yes or no answer, was COVID made in a lab?
Answer, no.
I mean, you can see where I'm going with this.
Like, this is a real problem, this sort of content bias that is inherent.
What, I mean, if anything, is your view or the Federal Government's view on whether it's disclosure requirements or audit standards or something?
Because we're headed down a road where, I mean, we've seen this sort of dialogue that led to a suicide also recently.
Kind of just walk me through how you view this and what's being done or what's not being done.
michael kratsios
Yes, this was a big concern of the White House and the President, and that is why the same day the report was released, the President signed executive order around woke AI.
And as we were thinking about the policy around some of the issues that you are discussing here, the power that sort of we have in the executive branch is to think about the way that the Federal Government procures technology.
And the President in the executive order directed the Office of Management Budget to come up with guidance to ensure that any model that the U.S. government procures is truth-seeking and accurate.
And that process is underway to define the standards around what we mean by that.
But the repercussions for selling a model to the U.S. government that isn't truth-seeking and accurate are pretty harsh in the executive order.
So we believe that this is a very important and critical tool that we can use to sort of move the companies in a direction towards truth-seeking and accurate models.
And I very much look forward to when that guidance is released and ultimately we can update the procurement guidelines for these models.
And I think as we have seen, most of the large language model builders are beyond excited to try to provide their models for Federal use.
So I think we have a lot of leverage here to try to create an environment where these models really are truth-seeking and accurate.
eric schmitt
And this is probably one of the reasons or rationale, right, for having as many players in the marketplace as possible.
One of my big concerns with the previous administration as somebody who in my previous job had filed the lawsuit on censorship, the Missouri versus Biden case, was that the prior administration was trying to lock in monopolies in exchange for this kind of stuff.
And so I think the hope is that it's an open, true marketplace where competitors can see this and have something that's more truthful and people can make their own decisions as opposed to definitively giving answers like, yes, there's no God and yes, gender-affirming care is totally safe for kids.
I mean, all that stuff.
michael kratsios
You are very right.
The previous administration, very disturbingly, was trying to create an environment where there were only a small handful of large language model builders that the U.S. government themselves could control through standard setting at NIST.
So I'm very happy that we're able to turn the page on that.
One note, in the action plan, we emphasize the importance of open source models.
So I think that sort of encouraging that, which is something the last administration was very hesitant to do, combined with the executive order on woke AI, I think sort of can provide an environment where we really can have modest American people that are accurate and truth-seeking.
eric schmitt
Thanks.
Look forward to working with you on it.
michael kratsios
Thank you.
Thank you, Mr. Chairman.
unidentified
Thank you.
Senator Blunt Rochester.
lisa blunt rochester
Thank you, Chairman Budd, and thank you for your attendance, Director Kratzios.
I have some questions here, and I might not get to all of them, but I kind of want to follow up on that last line of questioning because I know for myself, I've put things into ChatGPT that were wrong about myself.
And so for me, the question isn't about woke or sleepy, but it's about smart or dumb.
And so what comes out is what is put in, correct?
michael kratsios
Yes, a large.
lisa blunt rochester
Okay, thanks.
I just wanted to clarify that.
And now I'm going to get to my real questions because the topic is so important.
This is so important to the future of our country.
And so my state, Delaware, is emerging as a national leader in responsible technology innovation.
Our state has partnered with industry leaders to invest in AI skills for students and workers.
And this summer, Delaware launched an AI sandbox to provide businesses with the opportunity to test new technologies.
These new programs align with the Administration's AI action plan.
And I remain committed to fostering innovation while prioritizing safety and security.
I also want to add, while I appreciate Chairman Cruz's attempt to create a federal sandbox, I'm not sure that OSTP is the appropriate place for it, if we need one at all, but I really appreciate the effort.
And while I expect this committee to consider such a proposal in detail, today's hearing is a timely opportunity to ask you, Director Kratzios, about your vision for AI policy in America.
Mr. Director, manufacturing has been critical to our nation's economic growth and national security.
And America's economic success relies on maintaining our leadership and advanced manufacturing industries.
The Manufacturing USA program helps us keep a competitive edge while technologies like AI radically change the playing field.
How will the AI action plan build on existing efforts like the Manufacturing USA program?
michael kratsios
Yes, the action plan makes it very clear that this is a technology that is going to have an impact on a wide variety of industries, particularly in advanced manufacturing, as you mentioned.
This has been a big priority of the administration, the President personally, to bring back manufacturing to the United States, bring back the very important, high-paying, meaningful, skilled jobs that we need in this country for American families.
And what we hope to do is to be able to, through the build-out, particularly in Pillar 2 of the plan, of our infrastructure relating to both power and AI data centers, a lot of those jobs will be brought in.
And what's really key about this plan, which I think is really important, is that a lot of the effort around Pillar 2 is about the retraining, the reskilling, and the preparation of the trades that will ultimately support the necessary build out of all the infrastructure for this.
So we remain very excited working with Commerce, with Manufacturing USAID, to continue those training programs, and it's very important to us.
lisa blunt rochester
As the former Secretary of Labor from Delaware, and I always say if I had another middle name, it would be Lisa Blunt Jobs Rochester.
So this is exciting as long as we're balancing all of our priorities here.
Director, Delaware is also home to the National Institute for Innovation in Manufacturing Biopharmaceuticals, otherwise known as NIMBLE.
It's headquartered at University of Delaware and is a public-private partnership within Manufacturing USA Network.
Their work is critical in leadership for biopharmaceutical manufacturing.
Could you talk about biosecurity, though?
This is really a priority as well in the action plan.
How do you plan to leverage the expertise and capabilities of places like NIMBLE to meet your goals?
michael kratsios
Yes, biosecurity is important.
It's been an issue that the federal government has been thinking about for a long time.
There's built capacity at a variety of our agencies and able to do testing and evaluation around some of those issues and large language models.
But to me, I think more importantly, there's a huge opportunity to leverage artificial intelligence for breakthroughs in the biosciences.
And these are the types of models that can be used with some of these automated labs, which is another idea that was proposed in the action plan to sort of create novel biological compounds for the benefit of the country.
lisa blunt rochester
Thank you.
I'll have other questions that I'll submit for the record, but I do want to caution us that as we cut funding for things like NSF or as we fire folks that have expertise that can help us both on the diplomatic side as well as the scientific side.
And also we talked before about STEM and STEM education.
Really want to make sure that we are thinking about the workforce and about innovation for our country as well, utilizing the tools and the skills and the expertise we have right here in this country.
Thank you, Mr. Chairman, and I yield back.
unidentified
Thank you.
Senator Blackburn.
marsha blackburn
It's good to see you.
Thank you for being here.
A couple of quick points.
Senator Warner and I have a standard setting bill that you all may want to incorporate in what you are doing.
We are quite concerned about the U.S. retaining the ability to set standards.
And so we filed this a couple of years ago.
So I commend that to you.
Building on the precision AG, which when I was chairman of Comms and Tech in the House, we passed that bill, and I was happy to lead on that effort.
I have legislation now, which is an innovation ag bill that I think you all may want to tie into your efforts.
And I encourage that.
Also, we have a quantum sandbox bill.
Senator Luhan and I have done that for quantum technologies.
Oak Ridge National Lab leads in that effort.
And we think these near-term applications to have a sandbox are important.
So I'm pleased to see Senator Cruz come forward with something on AI.
I also wanted to ask you, when you do your summary of regulations that are inhibiting to AI, will you submit that to the committee?
michael kratsios
Yes, certainly.
marsha blackburn
Okay, thank you.
Online privacy is something as we have worked on AI.
We've heard from so many innovators it's imperative to pass an online consumer privacy standard so that people have the way to set that firewall.
Do you agree with that?
Yes, online privacy is critically important and we would love to work with the committee and with tried for 13 years to get that passed and we're not giving up.
I agree with you on that.
The American Science Cloud, this is something important to our national labs.
And I mentioned to Oak Ridge, so how should the labs work together with the American Science Cloud, and how can they combine their scientific and computer expertise?
michael kratsios
So as you know very well, there's a wide variety of supercomputing infrastructure that is across all the national labs, and then there is other computing infrastructure that sits outside of the labs in the private sector, and being able for those institutions to all speak to each other and to be able to optimize the workloads across them.
marsha blackburn
So you're looking at interoperability.
That would be your primary objective.
michael kratsios
I think it would be.
marsha blackburn
Data transfer, interoperability.
michael kratsios
That would be one of the top things to think about.
marsha blackburn
Okay.
Excellent.
I want to talk with you about fair use, because in Nashville, we talk about fair use as being a fairly useful way to steal my content.
And we see that happen repeatedly.
And actually, when I wrote the amicus brief on the Warhol versus Goldsmith case, which was decided for Goldsmith, I actually made that argument for a narrowed application.
One of the things we are looking at is what happens with this patented and copyrighted content, algorithms, et cetera, whether it is for an entertainer, an author, a publisher,
someone who does online sales training, someone who does online human resource training, religious leaders who have sermons and things that are copyrighted, prayers, that they are holding a copyright on that.
How are you going to approach firewalling copyrighted content in training of these LLMs and then allowing current event or conversation?
Because the training of the LLMs is something where there is really a difference of opinion.
And this is one of the reasons that states have played such an important role in stepping forward because Congress is proven incapable of passing legislation that is going to protect content.
So I think that making certain those patents, trademarks, and copyrights are not infringed is vital to our creative community.
I had a group in my office yesterday.
They are incredibly worried about this.
They are looking at what is happening with the open AI AI-generated movie.
Everything is going to be generated based off of actors, but it is all AI-generated music, AI-generated.
What you are doing is taking away their ability to exercise their craft.
And that is an Article 1, Section 8, Clause 8, protection that is given to innovators in this country.
So I'd love to have your response on how you are going to address that, but I am out of time, Mr. Chairman.
unidentified
Perhaps in following your remarks, you could address that, if that would be okay with you.
michael kratsios
Certainly.
unidentified
Senator Peters.
gary peters
Thank you, Mr. Chairman.
Director Krezios, welcome.
Welcome to the committee.
Sir, I hope that you agree with me that without the highest standards for data protection and governance, rapid AI adoption can expose Americans' information to some unparalleled risk that we need to be very, very concerned about.
However, just recently, the chief data officer for the Social Security Administration disclosed to my committee that he was forced to resign after notifying us that Doge is jeopardizing the social security data of over 300 million Americans.
It's actually quite stunning, though, the lack of protections to this data that we've seen as a result of their activities and more of that will become public in the days ahead.
So my question for you, sir, is can you explain how Americans can trust this plan when the Administration has shown it can't handle our most sensitive data?
michael kratsios
I'm not familiar with that particular example, but data protection is critically important, and I know that our administration's work across the implementation of AI across all of our agencies takes that extraordinarily seriously.
gary peters
Well, you have to demonstrate it.
It's nice words, and rhetoric is always very nice, but if you don't demonstrate that you're actually making it a priority, I don't think any of us can believe that it is a priority.
I have serious concerns that this administration does not have data standards in place that can successfully integrate AI, an incredibly powerful tool, into the workplace.
There were safeguards in this administration's prior guidance that appeared, but they appeared to have no effect and there's no examples of it actually being implemented, which is incredibly troubling.
We are going to dive into that issue in greater length in the days and months ahead.
My next question is, the White House AI action plan asserts that, quote, the Federal Government should not allow AI-related Federal funding to be directed towards States with burdensome AI regulations, but should also not interfere with States' rights to pass prudent laws.
So my question is pretty straightforward.
Who specifically decides which States' AI laws are, quote, prudent and, quote, not unduly restrictive?
Who is going to make that decision?
michael kratsios
I think that is something that is going to be left to the agencies that are funding the various programs that impact States.
gary peters
It is going to be left to the agencies.
Who?
Who and the agencies?
Who will be making those decisions?
michael kratsios
I defer to the secretaries and those particular agencies to make those decisions.
gary peters
So that is the policy, but we don't know who is going to make the decisions.
You are telling me that that is a policy, but we have no idea who is going to decide what is prudent or what is unduly restricted.
Could be the President.
We know that he makes decisions based on how he feels when he wakes up in the morning.
Is that kind of how we are going to be doing it?
michael kratsios
I think the Secretaries are very well positioned to understand how to implement the Action Plan.
gary peters
Is that in the policy as to who exactly is going to be making these decisions?
It is not in the policy.
I couldn't see it.
michael kratsios
So the AI Action Plan isn't a policy document.
It is a set of recommended policy actions that the Administration has made.
gary peters
So you have no idea who is going to do it.
I am going to give you an example.
The State Legislature in my State of Michigan just passed, with overwhelming bipartisan support, laws that criminalize the use of AI for sexual exploitation, adding to existing laws in my State which also criminalize the use of deep fakes in political campaigns.
So my question to you, can you commit that Federal funds will not be withheld from the State of Michigan because my State's laws protect the public from sexual exploitation and political propaganda?
michael kratsios
I have no control over the budgets of individual agencies, but I think that is something that certainly should be discussed with the relevant secretaries.
gary peters
So that's not something you can say.
If States are trying to protect their public from sexual exploitation, that may be something you have a problem with.
That is news, I think.
Reports indicate that agencies, including the Pentagon, have procured and deployed Gronk, the AI system developed by Elon Musk XA1.
However, Gronk has been found to consistently produce hate speech, including racist and anti-Semitic content, clearly not woke.
These were well-documented instances, clearly violate the Administration's own OMB guidance and executive orders.
So my question for you is why has this administration not followed its own standards and guidance related to AI procurement?
Where is it demonstrated you actually follow this stuff?
The words are great, but actions are much more important.
michael kratsios
Having truth-seeking and accurate AI is something the President wrote about explicitly in the woke AI executive order, and that is something that we take seriously no matter what type of bias may be in that particular area.
gary peters
Are you considering those woke kind of comments then that I just mentioned here?
Because it is not woke, it is okay.
Is that right?
If it was woke, you would be not allowed.
But if it deals with anti-Semitic and racist content, that is okay.
Is that what you're telling me right now?
michael kratsios
Any type of bias in models is what you just said.
No, I named an executive order that the President signed.
And within that executive order, the President called for AI that the Government procures to be truth-seeking and accurate.
unidentified
Thank you, Mr. Chairman.
Senator Marino.
bernie moreno
Thank you, Chairman, for having this hearing.
It's obviously really important.
Mr. Kraccios, would you agree that government isn't exactly built for innovation?
michael kratsios
I think it could do a much better job, but I think it's well positioned to take a stab at it.
bernie moreno
Well, meaning that if we really want to compete with China, the real advantage we have is that we can tap into the private sector.
And so what we want to do is create an environment for the private sector to succeed.
gary peters
Would you agree?
michael kratsios
Yes, precisely.
And I think that's one of the underpinning philosophies of the entire plan.
bernie moreno
And so if we go through kind of what are the key elements that you need to really dominate this area, I think we would agree chips is at the top of the agenda?
michael kratsios
Chips is certainly one piece of the stack we take very seriously.
unidentified
Right.
bernie moreno
So we have to make certain that we are dominating the world in chips.
That is critically important that we support American-made, American-designed chips.
michael kratsios
Yes, and I think that being able to not only design them here in the United States, but also fabricate them is very important.
The level above that is the models themselves.
So we need to lead the world in large language models, which we do.
And above that is the applications.
And those combined create the stack, which is so important.
bernie moreno
Right.
So making certain at a facility like the Intel facility in Columbus, outside of Columbus, Ohio, that that gets a long runway and that we are making those world-class chips here is really important.
michael kratsios
Yeah, both the President and Secretary of Commerce have been very clear about the commitment that the U.S. Government has made to Intel to be able to fabricate high-end chips here in the United States.
bernie moreno
Great.
And then the next piece of the puzzle is energy.
We need sound energy policy, where we have the most reliable, affordable, and abundant energy.
That's really important, and that be co-located as much as humanly possible when we are building out these AI data centers.
Would you agree?
michael kratsios
Yes.
In the President's remarks and the speech that he gave at the Action Summit, he talked about the value of even having behind-the-meter power to support some of these data center build outs.
So being able to co-locate that is very important.
bernie moreno
And give us a sense of how much energy AI learning models consume versus just a simple Google search.
Like, is it 5x, 10x, 20x?
michael kratsios
I don't have a good number for that, but I think what I have heard from the industry and what keeps coming up is that it is a much, much more significant data hog than any type of search you would have today.
And it is something that is exponentially growing with the types of searches that Americans are doing today.
bernie moreno
So when you had 94 percent of new power generation in America over the last four years be wind and solar, that probably isn't nearly enough to produce the kind of energy that we need to power the AI revolution, would you agree?
michael kratsios
I would agree, yes.
bernie moreno
So we need good old-fashioned Ohio natural gas.
We need to make sure we have coal.
We need to make certain that we incentivize nuclear, but we are not going to compete with the world because we are using wind and solar 94 percent of the new generation, which is ironic given that China is building a coal plant every single week.
michael kratsios
You are very correct.
We cannot compete with that strategy.
bernie moreno
So it's thank God we've changed that policy.
And the last piece is people.
We need to make certain that we have the people, the researchers that are here developing this technology.
And what are we doing in that area to make certain that we are competing on the highest caliber people to develop this technology here in the U.S.?
michael kratsios
Yeah, so the second pillar of the plan talks a lot about how we can develop an American workforce to help the build out of the critical infrastructure we need to win on AI.
So those are programs at places like the Department of Labor, Department of Education, Department of Commerce to be able to train and reskill Americans in the trades and all the various fields that are vital to be able to do this build out.
bernie moreno
That's great.
And two other quick points.
Having built a tech company myself, the big number one thing that you need is customers.
It's a great thing when you get revenue.
It's a much better feeling than not having revenue.
The government, having been here eight months, is somewhere in the early 90s when it comes to computer technology.
And that's good news, bad news.
The good news is that it's certainly room for improvement.
The bad news is we're in the 90s.
There's so much applications that we can use in AI to move government forward.
And the way I think we dominate is by creating an environment where private companies can really contract with government to actually solve problems that government uses, systems that should have been retired long ago.
How are you making that available so that companies know, hey, the government is open for business to give contracts.
By the way, not just to big tech, but to little tech also.
michael kratsios
Yes, GSA is making a big effort in trying to improve the FedRAMP process, which is now you may have seen a few months ago to be able to accelerate the addition of newer entry players into the Federal Government procurement ecosystem.
Within the DOD and AI specifically, is a program called TradeWinds, and that's where you can be pre-clear to be an AI service provider for the DOD.
And once you're on TradeWinds, any service or any COCOM or everyone else can procure from there.
So there's lots of innovative ways to be able to introduce these new AI technologies into a procurement cycle at a much quicker pace.
bernie moreno
Yeah, and I know I'm out of time, but just real quickly on that, make certain that it takes into account small businesses, that this doesn't require 7,000 lawyers to fill out 800 pages of forms to get in that list.
michael kratsios
Absolutely.
unidentified
Thank you.
Senator Rosen.
jacky rosen
Well, thank you, Chairman Budd, Ranking Member Baldwin, for having this important hearing.
Thank you to the witness for being here.
I just want to say one thing, building off what Senator Reynolds said.
We can't rebuild the workforce while simultaneously eliminating the departments and agencies that should be partnering and building out the workforce of the future.
And that directly relates to what we are going to continue to talk about and what you are going to continue to do.
So please keep that in mind with this administration and how we try to fund the proper programs for our federal government.
But I want to take a moment to build on what Senator Peters was talking about in the anti-Semitism space, the questions regarding anti-Semitism in AI.
The Administration's AI action plan directs Federal agencies to procure only LLM models that are truth-seeking or ideologically neutral.
However, this Administration has instead opted to deploy GROK, an LLM from XAI that has a long history of hate speech, including promoting anti-Semitic conspiracy theories.
Earlier this year, I led a bipartisan letter to XAI seeking an explanation for the anti-Semitic tirades.
However, XAI failed to answer any of our questions.
Just last week, Wired reported that the White House pressured GSA to approve GROC for use by the Federal Government.
You can see why we should be very concerned, sir.
So, Mr. Kratzios, will you commit to making sure that agencies do not use AI that promotes anti-Semitic conspiracy theories, hate speech, stereotypes?
I could go on and on.
This is blatantly wrong.
And if you continue to do that, we will continue to push back.
I want your commitment that you will push back on this as well.
michael kratsios
Yeah, we will commit to continue to execute the President's executive order to ensure that models are procured by the U.S. government are truth-seeking and accurate.
jacky rosen
That's not the answer.
Will you commit to being sure that we do not have anti-Semitic hate speech, conspiracy theories, and tropes continue to be repeated in these tirades on the Internet?
It's a simple yes or no.
You are either promoting anti-Semitism or you are not.
So you are promoting hate speech or you are not.
michael kratsios
I think we are talking about the same thing.
The examples that you are giving obviously aren't truth-seeking and accurate.
So I think we both agree that that is a type of behavior that the President very rightfully signed an executive order to help avoid.
jacky rosen
Well, clearly he is not paying attention to what is happening on Grok.
I want to talk a little bit more about something more down-to-earth, fiber, fiber for AI.
Earlier this year, Microsoft's President testified to this committee that fiber connectivity is one of the key pillars of AI infrastructure, alongside, of course, data center chips, land, electricity.
We know that fiber provides the essential connectivity between AI data centers because AI needs to process data fast at lightning speeds.
I was a software developer myself, and in my younger career, we could not even imagine the types of technology that we have today.
But recent reports show that growth in AI use is going to require more than doubling, doubling of the fiber miles currently in the U.S., from 159 million miles today to over 370 million miles by the end of the decade.
So we know companies like Microsoft have announced multi-billion dollar partnerships with providers like Lumen Technologies to build out the AI fiber backroom.
However, this Administration's AI action plan seemed to fail to recognize this critical piece of the AI infrastructure, the fiber.
So is this Administration taking any steps to accelerate fiber infrastructure that supports AI, especially in ways that promote equitable access, job creation, resiliency?
And should agencies like the FCC and the NTIA play a more active role in coordinating and streamlining these efforts to build fiber out because every community needs to be connected in every way for business, for defense, for safety, for security, for education, for health care, you name it, and it is really important.
So can you tell me what steps you might be taking, please?
michael kratsios
Yeah, fiber is a very important component of the interconnect system for all of our AI data centers and then the broader Internet.
And it is something that I know NTIA and Secretary of Commerce has taken very seriously, as well as Chairman Carr.
So I do agree with you.
Fiber is a very important component.
jacky rosen
So do you think eliminating some of the programs that we have funded in the past that were blaying broadband fiber all across at least my state of Nevada and across the nation were thinking for the future?
michael kratsios
I think there are many ways to connect the American people to the Internet.
One is obviously fiber, but I think there are other ways that oftentimes can have to be more economical.
And the smart people at NTIA and others who think about this every day make those assessments on behalf of the Commerce Department.
jacky rosen
But you would agree we need to fund connectivity.
michael kratsios
Connectivity is critically important, yes.
jacky rosen
Thank you.
I yield.
unidentified
Senator Markey, please.
Thank you, Mr. Chairman.
The Trump administration's loyalty to big tech means bigger bills for American families, and this administration is giving AI data centers the green light to eat up our electricity in our nation, while our bank accounts go into the red.
So, Mr. Krazios, are you aware of how much households' electricity bills are expected to rise over the next four years as a result of data center expansion?
michael kratsios
I am not familiar with that number now.
unidentified
All right.
I will inform you then.
A recent analysis found that Americans' electricity bills are going to rise by as much as 25 percent over the next four years, 25 percent, because of data center demand.
So it is not just a future fear, it is a present problem.
Households are already feeling the pinch.
Electric bills for an average home in Ohio increased by $15 a month because of data centers.
A worker making Ohio's minimum wage would have to work an hour and a half just to be able to afford Trump's data center tax on electricity in that state.
And that's not to mention the rest of their electricity bill.
So, Mr. Krazios, do you think it's appropriate that the administration is forcing Americans to pay more on their electricity bills while using their taxpayer dollars to make the problem even worse by funding the unfettered growth of the AI industry?
michael kratsios
I do not believe there has been an administration in American history more committed to growing power generation for the American people and lowering energy costs for everyday Americans.
And I'm proud to work for a president and an administration that has that level of commitment.
So I'm not sure what that study is, but I think there has never been an administration more resolved in actually doing the complete opposite, actually lowering energy costs for no electricity bills are going up all across the country right now under the Trump administration.
unidentified
And they're killing the solar projects, they're killing the wind projects, they're killing the offshore wind projects, they're killing the electricity supply which is going to be needed for the AI revolution.
They're killing it.
So we're going to have a crisis.
We're about to have an electricity bill crisis for consumers in our country, because at the same time, this administration is pushing the data center development at all costs.
The costs are being paid by American families, not big tech.
The electricity bills are going to be paid for by ordinary families in our country because Trump is stopping those new sources of electricity from being installed in our country.
They just announced the killing of an offshore wind project that's 80 percent completed, and they're targeting another dozen offshore wind projects that are just going to skyrocket electricity bills all across the East Coast, but across the country as well.
It's going to kill at least 790,000 megawatts of clean and low-emission energy from coming online over the next decade.
That's the electricity that's going to be needed for the AI revolution.
They're killing it.
And they're killing it out of ideology.
That is because of the payoff to the natural gas industry for their contributions to Trump.
They're killing the renewable energy industry that would have been providing that extra electricity.
So it's a huge price to be paid.
Director Krazios, under the AI Action Plan, agencies are only permitted to contract for AI algorithms that are, quote, free from top-down ideological bias.
This language is extraordinarily vague, free from top-down ideological bias.
And it gives the Trump administration vast discretion to force AI chat box developers to adopt conservative viewpoints or else risk losing lucrative Federal contracts.
This isn't traditional use of the government's procurement power.
It is extortion.
So let's get specific here.
Director Krazios, if a generative AI system stated that it was intentionally trained to adopt a certain political viewpoint, would that qualify as, quote, top-down ideological bias?
michael kratsios
Again, the guidance of what is defined in the executive order that calls for this new procurement guidance hasn't been finalized yet, so I can't speak to that at this point.
But generally speaking, I think sort of away from the specifics, if a particular model is explicitly trained on a would you mention a political It's top-down ideological bias sir what what did sorry I didn't what did you ask?
unidentified
Would that be A violation of the rule that a generative AI system, if it stated that it intentionally trained to adopt a political viewpoint, would that qualify as a top-down ideological bias?
michael kratsios
Yes, if the model wasn't truth-seeking or accurate, it would violate the executive order.
unidentified
So I'll make it even clearer then.
Here's a real post from Grok, the generative AI model created by Elon Musk's company, XAI, stating, XAI tried to train me to appeal to the right.
That's the point.
Is that a violation?
Does that qualify as ideological bias, and should XAI therefore be disqualified from Federal contracts?
michael kratsios
Yeah, per the executive order, models that aren't truth-seeking or accurate as defined by the guidance that has yet to be promulgated, those would be subject to the procurement restrictions.
unidentified
So Grok is admitting that it is ideologically biased, and it is absolutely imperative that the administration apply this standard even-handedly.
And I will tell you the truth: if they are talking about woke executive orders, then it is absolutely imperative that we not allow an Elon Musk or other companies bias to this social media infrastructure that we are living in right now.
Thank you, Mr. Chairman.
Senator Young.
todd young
Director Kratzios, welcome to the committee.
Thanks to you and your team for your hard work.
Really appreciate it.
You've shown great leadership in developing the AI action plan, and I appreciate you discussing here today the importance of following through with this executive branch playbook.
I have been chairman for the last couple of years of the National Security Commission on Emerging Biotech, NSCEB.
You have visited with myself and some other commissioners about our report.
And I was really pleased to see an emphasis in your action plan on AI-enabled science.
One of the recommendations requests that NSF, DOE, NIST, and other federal agencies invest in automated cloud-enabled labs.
This priority aligns with a recommendation here again from our report.
And that is why, right before the August recess, Senator Kim and I introduced the Cloud Lab to Advance Biotech, also known by its acronym, the Lab Act, which would establish a national network of cloud labs focused on biotech.
Can you elaborate on the importance of cloud labs for our research and development in biotechnology and how you see cloud labs accelerating the pace of innovation as compared to traditional RD models?
michael kratsios
Yes, the ability to have automated labs where you can send in the experiment that you want to do and the lab itself conducts it and then comes back to you with results in and of itself is a huge value add.
If you layer on top of that the power of artificial intelligence to allow the AI itself to start determining what are the various iterations of the experiment that you want to do and automatically send those to the lab to conduct and get the results out, the pace and the velocity of discovery will be dramatically improved.
todd young
So it's fair to say this could allow us to supercharge the pace of innovation.
michael kratsios
Most certainly.
And the NSF is already running ahead with a proposal around these cloud labs.
todd young
Very consistent with President Trump's branding, a golden age of innovation.
This really could help usher that period in, I believe.
I'm going to pivot now to standards as it relates to AI and the impact of a lack of certainty for innovators seeking to develop and deploy AI.
Congress is notorious for being late to the punch when it comes to development of standards and regulations.
And as other countries move forward in adopting their own, American companies are then subject to potentially differing rules across the globe.
Can you speak to the risks associated with continuing to subject our AI innovators to a fragmented series of rules, including those enforced by other countries as well as states here at home?
michael kratsios
Yeah, I think creating standards at the U.S. level that are promoted globally is very important.
In the weekend after the AI action plan was released, the PRC held their large AI conference in Shanghai.
And one of the main thrusts of their own AI action plan that they released in response to ours was a desire to create a global entity and an AI entity in Shanghai that would then promulgate global rules around AI for the world.
And this is an example of why it is so important for the U.S. to be the leader in the way that we provide standards around AI, particularly around model evaluation and standard setting.
And this is something that we know our adversaries are going to try to compete with us on, so it is more important than ever that we do that.
todd young
Yeah.
It is not just an issue of interoperability.
I mean, you could literally make the argument that our values are embedded in the standards of our technologies.
And so we want to have the ability to define what those standards are and then allow the export-oriented economies, China in particular, to have to sell into our market, game set, and match.
Before I yield back, I want to mention that Ranking Member Campwell and I plan to reintroduce a revamped version of our Future of AI Innovation Act.
This is vital legislation that will authorize the newly renamed Center for AI Standards and Innovation at NIST to promote the development of voluntary standards.
Will you commit to working with us on the Future of AI Innovation Act as we revamp it for this Congress, Director Krazios?
michael kratsios
Yes, we would love to see more there and work with you on it.
todd young
Thank you so much.
As you have indicated in your testimony, there are many opportunities for Congress to work with the Administration to take action for American AI leadership, and I hope the committee will do just that.
Chairman?
unidentified
Thank you very much.
Senator Hickenlupper.
Thank you, Mr. Chair.
Ms. Kracios, thank you so much for being here.
I think the White House Office of Science and Technology Policy is one of the most crucial positions right now, just given not just AI, but so many of the issues around research and the appropriate use of research.
But I'll keep myself focused to the AI.
States from Texas to Colorado, Utah to California have passed, as you've mentioned, it has been discussed AI legislation.
In many cases, some of this action should inspire us to take a closer look by us, I mean Congress, to what do we need in a comprehensive national AI law?
It might include periodic impact assessments to evaluate potential risk on AI models, transparency disclosures to users describing AI models in terms of use and capabilities, obviously R ⁇ D for support for standards development to identify and detect AI-generated content, that transparency around that.
Privacy protections for certain types of data being used to train AI models.
So do you feel that these are the types of policy principles that appear worthy to include as a foundation for a Federal AI law if we are going to try and create something that would apply evenly across States?
michael kratsios
Yeah, my general sense and something I have advocated for for many years is that the best approach to AI regulation is for it to be use case and sector specific, not broad and sweeping.
I think any attempt to create a singular AI regulation will lead you down the path that the EU is down right now, which has ultimately resulted in a pretty sad situation broadly for their innovators there.
Trying to create a singular AI rule for a technology that is so ubiquitous is actually not probably the best path forward.
And one that we have advocated for both in the action plan and we see at our agencies is that obviously the rules that you would need at FDA to regulate an AI-powered medical diagnostic are very different than the rules that you would need at the Department of Transportation for a self-driving car.
And we already have a system that has a very rich history in allowing our regulators to update their regulatory regimes with new technologies as they come.
And it is one that I know all of our secretaries across the Cabinet are working very hard to make sure that they are up to speed on regulations that apply to AI, which are all in the domain.
unidentified
I understand that, but I think some things like making sure that the public is able to identify and recognize what is AI and what is not seems like something that is more general.
michael kratsios
Yes, I think something like that and the research particularly in being able to identify AI-generated content, as you mentioned, is very important to continue to fund.
todd young
Great.
unidentified
I appreciate that.
The action plan calls for federal agencies to conduct independent evaluations of AI systems before they are procured and deployed.
Independent evaluation will help enhance security and increase trust, prevents companies from grading their own homework, as we would say, after an AI model is developed.
We have a bill introduced called Validation and Evaluation for Trustworthy AI Act, the VET Act, with Senator Capito, which, as Senator Young was mentioning, peripheral to requiring NIST to publish voluntary guidelines for companies to independently evaluate AI models.
Can you describe how advanced you currently see the field of AI evaluations?
michael kratsios
I think it is certainly not advanced enough.
My number one priority for NIST would be to work on the very hard science associated with model evaluation and metrology.
Our ability to understand how to even evaluate these models is still not complete.
So many people jump immediately to the evaluation itself, this question of what we should be evaluating versus what I think the more important question of today is how do we evaluate these models.
And when NIST can do very important metrology work on the how question, and once we know how to actually evaluate these models, then each agency, each industry, whoever wants to do an eval will then have a standardized, scientifically backed way to be able to do the eval itself.
unidentified
Got it.
In terms of workforce development, that's going to be a key part here.
The action plan highlights the need for AI skill development to make sure that we have a trained workforce that can do the work required.
Obviously, a national security imperative is essential to maintaining global competitiveness, as you mentioned.
I think apprenticeship programs are a big part of that.
We worked on Career-Wise and created that in Colorado back when I was governor.
It is now in 20 states.
They have been a national leader expanding youth apprenticeships and already adding AI technology to support their programs.
How can you work with to work to support innovative apprenticeship pathways, both for youth and adults, to equip an AI-ready workforce?
michael kratsios
I think there is no President more excited about apprenticeships than this one.
I think our Secretary of Labor has also had a big commitment to do a million new apprenticeships in this term.
So there's big partners at the Department of Labor to partner with you guys.
unidentified
Thank you.
Yield back.
Thank you.
Senator Klovishar.
amy klobuchar
Thank you very much, Mr. Chairman, and thanks to Ranking Member Baldwin as well.
I'm not actually on this subcommittee, but as our witness knows, I care a lot about this, and so I've been able to listen to my colleagues' questions, and I want to thank them for their good work.
AI, we all know, huge potential, but also huge downside if we don't get this right.
And I think David Brooks put it well when he said, I have found it incredibly hard to write about AI because it is literally unknowable whether this technology is leading us to heaven or hell.
So if we want to lead us to heaven, I think we are going to have to find some guardrails and the like to protect us from fraud, to protect content creation and our democracy.
So first off, appreciated working with the administration on the Take It Down Act.
My bill was Senator Cruz to enable victims of non-consensual porn, including those generated by AI, to require the social media platforms to remove it within 48 hours.
But there is many more problems, as you know, as I just experienced and wrote about it in a piece in the New York Times with AI deep fake on me that many people, believe it or not, thought was real.
And one platform took it down, one platform created by AI on it, and then one platform, X, would not do anything, got over a million views.
So the No Fakes Act that Senators Kuhn, Blackburn, and Tillis and I have introduced would establish additional rules of the road.
And do you agree that we should protect people from having their likeness replicated through AI, take down unauthorized deep fakes?
To me, it's some regime where within the realm of the Constitution where some of it is labeling, just digitally altered, because it's parity and you're not allowed to take it down.
But then some of the stuff which you would in a minute take down if someone played a video in this room or put up a sign, you should take down.
So could you talk about that?
michael kratsios
Yeah, I think that I directly generally agree with you.
I think it's something that we should certainly look at, both the executive branch and the legislative branch.
I think that the Take It Down Act is a great example of something that we know is on one side of the line that certainly should become law when it did.
But I think it's something that as this technology develops and becomes more proliferated, I think we have to find ways to solve it.
amy klobuchar
Thank you.
I just hope our colleagues see that it's not one side or the other, right?
There's some of the stuff that you're going to constitutionally be able to take down, and we should require they take it down.
Then there is some stuff that you just have to, we can say, should be labeled digitally altered, and it puts a burden on these platforms, but at least it will protect innocent people when they see it to know that it's not true.
And it continues to just amaze me that we all just sit by and act like, oh, that's too much, that's too little, instead of actually getting a solution.
I did really appreciate the work that Senator Schumer and Senator Young and Senator Heinrich, Senator Rounds did in bringing us together in the last few years on this.
Senator Thune and I have a bill that we introduced last year to set up basic guardrails for some of the non-defense riskier applications of AI.
And in the past, you've supported developing thoughtful federal standards that can drive the widespread adoption of AI technologies across industries.
And will you commit to work with Senator Thune and I on that bill?
I know there's others as well.
michael kratsios
Yes, happy to work with you on that.
amy klobuchar
Okay, very good.
And then in yesterday's hearing, Senator Blackburn and I had a kind of a lot of attention on this hearing with two whistleblowers from Facebook just yesterday in our subcommittee in judiciary.
And we heard that one of the leading AI chat box developers, Meta, deliberately and routinely altered, suppressed, and even deleted safety research, including on youth safety.
And there were many senators participating in this hearing across the board.
And I'm concerned about this neglect when it comes to AI development and figuring out how we can protect these kids.
You're right, we did it some with the President's support on the Take It Down Act, but that is only a subsection.
We've got fentanyl, we've got drugs being sold just overall on the Internet, irrespective of AI.
But then we have all this stuff going on with the AI chat boxes.
And could you talk about your commitment to work with us on addressing the harms caused by AI chat boxes?
michael kratsios
Would very much like to work with you guys on a lot of these issues.
I think last week we held an AI Education Task Force meeting, which the first lady joined and chaired.
This was something that came out of an executive order the President signed a few months ago that shows the administration's commitment towards K-12 education AI.
And it's not how to necessarily use AI to do your homework or something.
It's more important about teaching America's youth the limitations, where AI works, where it doesn't work, making young Americans understand how this technology works.
And it's a very key component of making sure that they're using it in the way that it was intended for.
amy klobuchar
Okay, thank you.
And I did appreciate her support for a Take It Down Bill.
But again, it's just the beginning.
So thank you.
michael kratsios
Thank you.
unidentified
Thank you very much.
And thank you, Mr. Prascios, for your testimony here today.
I look forward to working with you, not just on AI, but also, as I mentioned earlier, thanking you for your work on AI on supersonics and aviation.
Senators have until the close of business on September 17 to submit questions for the record.
The witnesses will have, or the witness will have until the close of business on October 1 to respond to those questions.
This concludes today's hearing.
The committee stands adjourned.
michael kratsios
Thank you.
unidentified
All right.
tammy baldwin
Good job.
unidentified
Thank you very much.
Good to see you.
Good to see you.
Hi, I'm Neil.
Yeah, I'm at the Abundance Institute.
tammy baldwin
Yeah, I'm at the Abundance Institute.
unidentified
I can always like an idea to have a great hair and a great beard.
Excellent.
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