A Supreme Court ruling that lets the president fire heads of independent agencies at will, and a Cyclospora outbreak that sickened more than 11,500 people, are both signals of the federal government's diminishing capacity. For the AI industry, which depends on public trust and stable regulation, this erosion is a direct threat to its long-term viability.
The June 29 ruling in Trump v. Slaughter removed for-cause protection for agency heads, making it nearly impossible to build a non-partisan, expert-driven agency. At the same time, the Cyclospora outbreak traced to contaminated lettuce revealed how budget cuts forced the network that tracks foodborne illness to stop requiring state reporting. Food safety helped build the modern regulatory state; its retreat from that mission is a fitting symbol of decline.
When Elon Musk, who leads the AI company xAI, ran DOGE, his team gutted federal agencies, drove out experienced staff, and left the remaining workforce demoralized. Gallup recorded a sharp drop in job satisfaction and a rise in burnout. A February policy from the Office of Personnel Management, called Schedule Policy/Career, could let the administration reclassify 50,000 career civil servants in policy-influencing roles and strip their firing protections. If the policy survives court challenges, a technical staffer who flags a favored company's AI model as unsafe could be fired for telling the truth.
A referee the public doesn't trust
A non-partisan, apolitical government agency guided by expertise is exactly what AI needs. Some industry leaders are lobbying for regulation even as others fight it. The industry requires public trust. Johns Hopkins University researchers found that even daily AI users who like the technology want it regulated. The Pew Research Center found that about 67% of Americans have little or no confidence in the government to regulate AI effectively. The public wants a referee, and doubts the current one is up to the job. Rebuilding that capacity means investing in expertise, and targeted training for government professionals - such as AI for Government resources - can help close the knowledge gap.
Well-crafted regulations that earn public trust and help the industry flourish are far more likely to come from an apolitical expert agency. Even a bad regulatory regime is better than an unstable one, particularly for an industry with AI's capital needs and multi-year horizons. Companies can plan around rules they dislike, but not around rules that change every four years or at a president's whim.
The talent drain and the safety vacuum
The Supreme Court made a partial exception for the Federal Reserve based on its long tradition of independence. AI has no such tradition, so any AI regulator would not get that exception. Yet by the industry's own account, AI could upend the economy or even destroy humanity, making regulation more important than the Fed, not less.
The government can't match AI salaries, but it offers currency money can't buy: mission, prestige, and problems no private employer can hand you. The Slaughter ruling and Schedule Policy/Career burn that currency. The government's own evaluation body, once the AI Safety Institute, was renamed the Center for AI Standards and Innovation. The word "safety" was dropped, its focus shifted to voluntary testing, and much of its technical staff are gone.
The irony is that some of the people dismantling this capability are the ones who will need it. Elon Musk warned that AI carried "the potential of civilization destruction," then ran the effort that hollowed out the government. David Sacks, the venture capitalist who served as White House AI czar, has led the drive to preempt state regulation and keep the federal touch as light as possible. State-by-state AI regulations would be a nightmare for the industry, but the credibility of arguing for federal preemption depends on federal regulations being seen as good enough to obviate state action.
The price of regulatory capture
Americans have seen the consequences of weak and captured regulators too often to take them on faith. Boeing lobbied for a more relaxed FAA and was rewarded with two 737 MAX crashes, 346 people dead, and travel sites giving people the option to avoid Boeing airplanes. Wall Street pushed for loose regulation and got the 2008 crash, which erased $11 trillion in household wealth - the worst single-year drop the Fed has ever recorded.
The level of public distrust of AI is such that there is no long-term future without regulation. The industry needs the public to believe that AI is as safe as eating lettuce used to be. That requires a strong, expert, insulated regulator. The AI industry has vast financial resources and enormous political influence. It needs to throw them behind strengthening the federal government's capabilities, not weakening them.
Why this matters for Government
For federal employees, the Slaughter ruling and Schedule Policy/Career are not abstractions - they directly threaten job security for career civil servants. The gutting of agencies and the loss of technical talent directly undermine the government's ability to oversee a technology that many of its own creators call an existential risk. Policy makers and public servants who want to rebuild that capacity need a clear-eyed understanding of AI's risks and governance. Programs like the AI Learning Path for Policy Makers can provide the foundation for that work. The choice facing the industry and the government is not whether AI will be regulated, but whether the regulation will be stable, credible, and built by experts - or chaotic, partisan, and enforced after a catastrophe.
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