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Aaron Levie on current implicit AI regulation

Aaron Levie argues that de facto AI regulation has arrived, with powerful models likely requiring government review before release. He warns this could slow innovation, create release backlogs, and incentivize sovereign AI strategies abroad, while open-weight models may initially escape controls.

read2 min views2 publishedJun 26, 2026
Aaron Levie on current implicit AI regulation
Image: Marginal Revolution

We now have de facto AI regulation. It’s not obvious why from here on out models that have certain levels of capability or are trained on certain compute sizes won’t have to be reviewed by the government before release.

Realistically, as AI models became more and more powerful this was going to be inevitable (I think it’s too early, but here we are). So now it’s mostly just interesting to think about the implications and scenarios from here. A few would be:

* America gets to control who gets access to frontier intelligence and when. This generally works as long as we remain at the frontier at all times and don’t have a risk of being surpassed. At the moment we have a clear lead in frontier intelligence so this is a good bet, but lots of motivated parties would love to change that.

* This likely creates backlog of AI releases which means that we will see less rapid fire back and forth jumps in model progress. Bull/fine case is that we just get bigger step functions per release at a slower rate and we end up at the same point we would have. Bear case is those incremental smaller jumps were necessary for the continued flywheel of innovation.

* Other countries likely have even more incentive to at least hedge their bets with sovereign AI strategies so aren’t dependent on access to US AI all times. Previously this was relatively moot because the alternative wasn’t good enough, but that could change out of necessity and what we’re seeing in China.

* Open weights obviously a big winner here as it becomes what likely sovereign AI gets built out on, and what (for now) can still be released to the market without the same controls. One interesting question would be how regulation eventually extends to open models, which would have its own set of long term consequences.

Anyway some big updates to everyone’s mental models of AI regulation as a result of the capabilities we’re now seeing in AI. Wild times.

Here is the link. I would say I have long thought something like this was coming, but am pleased we got in so much early progress “under the wire” up until now. And here is more from Aaron.

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