The Plan Is Out. Now What?

The White House AI Action Plan outlines a clear vision: deregulation at home, data centers, cutting China out. But vision doesn't mean execution.

The real story is the massive gap between what America wants to do and what its allies are legally and politically willing to do. That gap could sink the entire strategy.

$55 Billion Spent at Home — But China Can Route Around It

According to the Daily Signal, the U.S. Department of Defense has spent at least $55 billion over the past decade on domestic AI and defense technology production. Companies like Maryland-based Headwall, which develops AI-powered virtual command centers for the military, law enforcement, and hospitals, are direct products of that investment.

Headwall co-founder Geoff Bundt told the Daily Signal the technology can run in a "completely off-network environment" — meaning no foreign access, no back doors, no dependency on Chinese-made components. That's exactly the kind of domestic capability the Trump AI Action Plan is designed to accelerate.

Sen. Rick Scott, R-Fla., a senior member of the Senate Armed Services Committee, put it bluntly: "It's foolish to rely on a country that hates us for national security."

The Ally Problem Nobody Is Discussing

The United States does NOT control the entire semiconductor supply chain. Not even close.

According to a March 2025 report by Gregory C. Allen and Isaac Goldston at the Center for Strategic and International Studies (CSIS), countries like the Netherlands, Germany, South Korea, Japan, and Taiwan control critical chokepoints in the AI and semiconductor value chain. ASML in the Netherlands makes the extreme ultraviolet lithography machines that nobody else can replicate. Taiwan makes the most advanced chips. South Korea makes the memory.

The U.S. can ban whatever it wants. If those allies don't follow suit, China finds another door.

The CSIS report is direct about this: "The success or failure of the U.S. export control strategy is thus dependent on its allies' ability to implement controls outside of this traditional architecture."

U.S. allies often don't have the legal equivalents to American tools like the Foreign Direct Product Rule or the Entity List. They can't just copy-paste Washington's playbook. They'd have to build new legal frameworks from scratch — and that takes time, political will, and domestic pressure their governments may not have.

What the Biden Administration Started — And Trump Kept

The Biden administration did the foundational work on this front. According to The Regulatory Review, the U.S. Department of Commerce published a final AI export control rule in January 2025 — making the United States one of the first countries in the world to regulate AI specifically through export controls. The rule allows U.S. companies to export AI chips to allies freely, while blocking exports to "countries of concern" — meaning nations under U.S. arms embargos, with China at the top of the list.

On December 2, 2024, Commerce also added 140 companies to the Entity List, expanded the Foreign Direct Product Rule, and restricted access to high-bandwidth memory — the kind of memory that powers advanced AI training.

Trump came in and, according to The Regulatory Review, issued an executive order on his first day in office directing the government to "identify and eliminate loopholes in existing export controls." He kept the Biden architecture and told his team to tighten it.

The Multilateral Architecture Is Too Slow

The CSIS report flags a structural problem that goes beyond any one administration. The existing multilateral export control system — frameworks like the Wassenaar Arrangement — was built for a different era. It's not flexible enough and not fast enough to match how quickly China is moving.

China isn't waiting around for Washington to close loopholes. It's investing aggressively in domestic chip production, recruiting talent, and using front companies to route around restrictions. The U.S. can move fast unilaterally, but unilateral action has limits when key manufacturing nodes sit outside American jurisdiction.

Allies' enforcement capacity and willingness to act are crucial to the success of U.S. and allied technology competition with China. Some are dragging their feet because they don't want to blow up their own trade relationships with Beijing.

What This Means for Regular Americans

If the AI Action Plan works, American companies — not Chinese ones — dominate the next generation of defense technology, data infrastructure, and AI development. Jobs, security, leverage. All of it stays here.

If the ally coordination fails, China continues building advanced AI capability through backdoor chip access. The $55 billion in domestic defense AI investment gets undermined by a leak in the international dam.

The companies building American solutions — like Headwall — are doing their part. The White House put a plan on paper. Congress has the right instincts.

Whether America can convince its partners that protecting their own chip-export loopholes is a luxury they can no longer afford remains to be seen. China is not waiting.