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Illustration: Lazaro Gamio/Axios

After months of pushing China to retreat from its strategy to dominate the technologies of the future, President Trump today ordered U.S. agencies to prioritize keeping the U.S. ahead in the development and deployment of artificial intelligence.

He did not allocate specific sums of money — and it will be expensive to match Chinese spending — but told aides to tally up what it will cost to maintain the lead, and to budget it.

Trump's executive order comes amid tense brinkmanship between the U.S. and China, driven by a trade war declared by the U.S.

  • The order brings new focus to the core of U.S. unhappiness: Beijing's strategic plan "Made in China 2025" and its goal of capturing the commanding heights in AI, quantum computing, biotechnology and more.
  • The bottom line: This may be an attempt by Trump to signal deeper resolve ahead of coming new talks with Chinese leader Xi Jinping, possibly in March.

Simply signaling an all-hands push by the White House on AI is valuable, says Michael Allen, of Beacon Global Strategies and a former member of President George W. Bush’s National Security Council.

  • "This has a galvanizing effect and elevates AI as a critical national priority," Allen tells Axios.
  • "I read [the order] as a demand for the federal agencies to give the White House specifics for what steps they are going to do to make AI a priority and what resources they need to make those steps a reality," says Gregory C. Allen, an adjunct senior fellow at the Center for a New American Security. "Overall, this [order] is great news."

The billion-dollar question is how the government's new priorities will be funded.

  • Trump set aside no new money in his executive order. When Axios asked how the initiative will be funded, a senior administration official said that money is the purview of Congress.
  • While true that Congress is in charge of appropriating funds, the White House can move existing money around, says William Carter, a technology policy expert at the Center for Strategic and International Studies.
  • "If they can find $5 billion for a border wall, they should be able to find a few billion for the foundation of our future economic growth," says Carter.

What the plan does do, however, is tee up civilian agencies to make AI investments, and encourages them to do so.

So far, U.S. funding for AI has been anemic.

  • An analysis from Bloomberg Government found that the Pentagon's R&D spending on AI has increased from $1.4 billion to about $1.9 billion between 2017 and 2019. DARPA, the Pentagon's research arm, has separately pledged $2 billion in AI funding over the next five years.
  • It's hard to put a number on the entire federal government's AI spend, says Chris Cornillie, a Bloomberg Government analyst, because "most civilian agencies don't mention AI in their 2019 budget requests." (The new executive order would keep better track of civilian agencies' AI funding.)

These numbers pale in comparison to estimates of Chinese spending on AI. Exact numbers are hard to come by, but just two Chinese cities — Shanghai and Tiajin — have committed to spending about $15 billion each.

One element of funding is building and maintaining talent superiority, and education is a pillar of Trump's executive order.

  • A key issue is whether threats to slow down immigration and make it more difficult for foreign students to attend U.S. schools will detract from U.S. competitiveness, says Elsa Kania, an adjunct senior fellow at CNAS.

Go deeper

Janet Yellen confirmed as Treasury secretary

Janet Yellen. Photo: Alex Wong/Getty Images

The Senate voted 84-15 to confirm Janet Yellen as Treasury secretary on Monday.

Why it matters: Yellen is the first woman to serve as Treasury secretary, a Cabinet position that will be crucial in helping steer the country out of the pandemic-induced economic crisis.

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The parent company of the Boston Red Sox and Liverpool F.C. has ended talks to sell a minority ownership stake to RedBall Acquisition, a SPAC formed by longtime baseball executive Billy Beane and investor Gerry Cardinale, Axios has learned from multiple sources. An alternative investment, structured more like private equity, remains possible.

Why it matters: Red Sox fans won't be able to buy stock in the team any time soon.