Trump AI Deregulation US Fuels Multi‑Year Trillion‑Dollar Tech Surge

In July 2025, President Trump unveiled a 28‑page “Winning the AI Race” plan comprised of three sweeping executive orders aimed at dismantling regulatory barriers and mobilizing capital for American AI leadership. The orders collectively target federal funding mandates, environmental and permitting processes, and trade restrictions—paving the way for an unmatched surge in both public and private investment over the next five years .

Key provisions include:

• Ban on “ideological mandates”: All AI projects receiving federal funds must eliminate Diversity, Equity & Inclusion requirements from their development guidelines—an effort to ensure models remain “value‑neutral” under the White House’s definition .

• Streamlined data‑center approvals: By relaxing National Environmental Policy Act (NEPA) reviews and local zoning hurdles, the plan fast‑tracks construction of high‑performance computing facilities needed to train large‑scale AI systems .

• Expanded export incentives: The administration pledges to lift or ease export controls on AI hardware and software, positioning the U.S. as a “global AI export powerhouse” while reducing tariffs and bureaucratic red tape .

On the private side, industry leaders have already responded in kind. Empirix Partners reports that American tech giants invested over $1 trillion in AI‑specific data‑center infrastructure during 2025 alone, as companies race to secure compute capacity for next‑generation models . Looking beyond, Morgan Stanley projects $2.9 trillion in global data‑center capital expenditures through 2028—most of which is expected to flow into U.S. projects thanks to the favorable deregulation climate .

Meanwhile, on the public side, the White House’s FY2025 budget request earmarked $3 billion for AI R&D across federal agencies, with additional funding hidden within broader technology and defense appropriations. Although the direct federal allocation remains in the low‑billions, when combined with private capex and state incentives, total U.S. AI‑related investment is on track to surpass $1 trillion cumulatively over the next five years—cementing America’s advantage in the global AI race.

Canada’s AI Infrastructure Void Exacerbates Productivity Crisis

While the U.S. rushes ahead with massive compute build‑outs, Canada remains without a dedicated AI infrastructure fund or clear pathway to scale its digital backbone. This vacuum not only stalls AI adoption but compounds a broader productivity malaise that Canada has struggled with for years.

Canada’s productivity challenges stem from systemic underinvestment across both core and digital infrastructure:

• GDP per capita gap: In 2023, Canada ranked 48th among U.S. states in GDP per person—trailing all but Arkansas—and no province broke into the top half of U.S. jurisdictions, highlighting a longstanding output deficit.

• Capital formation shortfall: Canadian firms invest 1.5× less fixed capital per worker than their American counterparts. In high‑tech sectors like ICT, U.S. companies spend around $80,000 per employee on machinery and equipment versus just $15,000 in Canada—a fivefold disparity that directly limits digital‑scale projects.

• Infrastructure drag: Chronic underfunding of housing, transit, healthcare facilities, and energy grids places additional strain on businesses, diverting resources away from innovation and squeezing out productivity gains.

At the same time, experts estimate that generative AI alone could contribute roughly $200 billion to Canada’s GDP by 2030—about 7 % of current output—if only the country had the compute capacity and capital formation to deploy models at scale. Without strategic investments in data centers, high‑performance clusters, and semiconductor partnerships, however, this vast economic opportunity risks slipping through Canada’s fingers.

Adding insult to injury, Ottawa’s response has been limited to advisory “critical commercialization” programs for SMEs—offering workshops, networking events, and regulatory toolkits without any accompanying grants or infrastructure support. As a result, Canadian innovators face a dual burden of outdated physical infrastructure and an absence of digital‑scale resources, leaving them ill‑equipped to compete in the fast‑moving AI economy.“Critical Commercialization” for SMEs Falls Short

Canada’s first AI minister, Evan Solomon, has championed a shift from heavy‑handed regulation toward “harnessing the technology’s economic benefits,” dubbing it “critical commercialization” for small and medium‑sized enterprises (SMEs). Yet in practice, the initiative offers only advisory support without any direct financial backing:

• Workshops & toolkits: Virtual sessions on AI best practices, model selection, and implementation frameworks—valuable for raising awareness but insufficient without capital to invest in hardware, software licenses, or integration services.

• Networking forums: Periodic events connecting SMEs with vendors and larger AI companies, designed to foster partnerships but lacking seed‑grant incentives to pilot real‑world solutions.

• Regulatory guidance: High‑level toolkits on data protection and privacy compliance meant to “protect people’s data,” yet no subsidies or tax credits accompany these guidelines to offset the costs of secure deployments.

• Stepwise regulation promise: Solomon has acknowledged that regulation “will have to be assembled in steps,” but no interim funding programs or pilot grants have been announced to bridge the gap while frameworks are developed.

By focusing solely on advisory services without any dedicated capital allocation—such as data‑center grants, compute‑cluster subsidies, or R&D tax credits—Canada’s “critical commercialization” risks leaving SMEs to self‑finance their AI journeys, undermining the very economic benefits the program purports to unlock.

Broader Implications and Call to Action

As Trump Deregulates AI and unleashes massive, multi‑year spending that reshapes the competitive landscape:

• U.S. tech supremacy accelerates, cementing American firms’ leadership in cloud AI services, chip manufacturing, and global AI export markets.

• Canadian brain drain risk looms, as researchers, engineers, and startups migrate south to access world‑class compute infrastructure and regulatory certainty.

• International influence wanes, with Canada’s weak infrastructure commitments undermining its credibility and ability to shape global AI standards and governance.

Canadians must demand that Ottawa back “critical commercialization” rhetoric with tangible investments:

1. Data‑center and compute grants to establish a domestic AI backbone.

2. Pilot funding for SMEs, especially in tech‑driven sectors, to spur real‑world AI adoption.

3. Tax incentives and R&D credits that unlock private capital for high‑performance AI projects.

Only through these bold, coordinated measures can Canada reclaim its place in the AI‑driven productivity surge and secure a competitive future.

Sources

1. The Guardian, “Trump AI action plan,” July 25, 2025. Available at: https://www.theguardian.com/technology/2025/jul/25/trump-ai-action-plan

2. The Guardian, “China calls for global AI cooperation days after Trump administration unveils low-regulation strategy,” July 26, 2025. Available at: https://www.theguardian.com/technology/2025/jul/26/china-calls-for-global-ai-cooperation-days-after-trump-administration-unveils-low-regulation-strategy

3. Al Jazeera, “Trump administration unveils wide-ranging AI action plan,” July 23, 2025. Available at: https://www.aljazeera.com/economy/2025/7/23/trump-administration-unveils-wide-ranging-ai-action-plan

4. BNN Bloomberg, “Report highlights systemic underinvestment in Canada as productivity stalls,” February 24, 2025. Available at: https://www.bnnbloomberg.ca/business/economics/2025/02/24/report-highlights-systemic-underinvestment-in-canada-as-productivity-stalls/

5. Empirix Partners, “Tech giants invest over $1 trillion in AI data centers in 2025.”

6. Morgan Stanley, “Global data‑center capex projected at $2.9 trillion through 2028.”

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Alex Masters Lecky, Founder Peak Demand AI Agency Toronto