West Wing hit by 3-way schism as Trump executive order gets last-minute derailment

The Trump administration has fractured into warring factions over how best to regulate artificial intelligence, as industry pressure forces the president to reverse himself on his planned executive order trying to lay ground rules for the industry, reported Politico on Thursday.

The change came as experts raised the alarm about the level of lobbying from AI and tech firms since the president started his second term.

According to the report, the AI debate has split into "three main camps in the West Wing." The first camp, including former AI adviser David Sacks, wants the regulations to be hands-off to give U.S. tech firms a fighting chance against China.

On the other hand a second camp, led by Secretary of Defense Pete Hegseth, wants "greater barriers" to models like Claude's Mythos, fearing China could instead commandeer that technology for itself.

A third camp, including Treasury Secretary Scott Bessent and White House chief of staff Susie Wiles, want minimal regulation but also want AI firms to "voluntarily provide the U.S. first glimpse of its models" to check for vulnerabilities and risks, the report said.

This third way was essentially how Trump's executive order on AI would have worked — but the firm deregulation advocates, with Sacks at the front, "derailed" Trump's AI executive order as too burdensome, according to the report.

One senior White House official insisted to Politico that everything is still going to be sorted out. “This isn’t canceled, it’s postponed," they said. "And might a clause here or there be changed? Possibly. But it’s also possible that we talk to the president about it, and he says, ‘Yeah, that sounds logical. Let’s just go do it.’”

But this disagreement carries over into the broader Trump coalition. A right-wing group called Humans First, featuring dozens of conservative leaders, recently called on Trump to pass mandatory review standards for AI models before they can be made public.