Table of Contents
Key Takeaways
- Federal Regulations: The Department of Government Efficiency (DOGE), initially led by Elon Musk, built an Artificial Intelligence (AI) tool to analyze 200K federal regulations and flag half for elimination.
- Early tests at Housing and Urban Development (HUD) and Consumer Financial Protection Bureau (CFPB) reportedly cut more than 1,000 rules in weeks, but staffers noted the AI misinterpreted statutes.
- Legal experts question if mass deregulation via algorithm violates the Administrative Procedure Act, which governs rule reversals.
The AI Chainsaw Approach to Red Tape
Imagine a bureaucratic nightmare, but instead of Milton smashing a printer, we have the Trump Administration with an AI-powered chainsaw cutting through the Federal Register. Department of Government Efficiency (DOGE)’s “Deregulation Decision Tool” has already scanned 1,083 housing federal regulations and produced an entire draft of the Consumer Financial Protection Bureau (CFPB)’s deregulations, to eliminate 100,000 regulations by January 2026.
The internal logic of the tool is simple enough, parse laws of regulation that are not specifically required. So, for instance, if a statute states “the Environmental Protection Agency (EPA) shall regulate emissions” but does not indicate how to do so, then the AI would likely view the regulatory minimum as general. DOGE believes this can save $3.3 trillion a year in compliance costs. Some perceive this as a bulldozer attempting to function as a scalpel.
Speed vs. Accuracy: The AI’s Growing Pains
Employees from the HUD reported that the AI misread or misinterpreted legal texts, wrongly claiming certain rules “exceeded statutory authority.” Also, some of them noted that the AI hallucinated, just like it did with Veterans Affairs (VA) contracts (about an earlier AI error by DOGE that incorrectly calculated VA figures).
The push for deregulation presents practical challenges. While the White House expects employees to be at the top of the ‘leaderboard,’ they lack the personnel to draft the repeal notices. Concurrently, agencies like Transportation and Labor are competing to eliminate the most regulations, with 73,000 words removed from the Federal Register in May alone.
Federal Regulations: Legal Quicksand Ahead
Here’s the real catch: AI can’t testify in court. If the administration bypasses standard repeal processes (like public comment periods), judges could reinstate axed rules, and this can be compared to “trying to demolish a building with firecrackers; it might make some noise, but the structure stays up.”
Even if the AI’s “delete list” survives legal challenges, businesses might disregard changes until court decisions are made, as no company wishes to risk deregulation that could be overturned.
Efficiency or Chaos?
DOGE’s experiment is trying to mix libertarian ideals with practical governance. Crypto fans may see it as a cool example of how AI could simplify SEC or CFTC rules, but some critics think it’s a risky move for public safety, and it’s fair enough to think that way.
Final Thought: Would you trust an AI to rewrite your Federal Regulations rules? Sound off below.
For more AI-related stories, read: Poseidon AI Secures $15M From a16z to Build AI’s Missing Data Physical Layer
