Microsoft President Brad Smith has a message for Washington: you can’t regulate an industry with vibes. Speaking at the AI for Good Global Summit on July 9, Smith called the current US approach to AI policy “regulation without transparent or complete rules,” a phrase that sounds diplomatic but translates roughly to “nobody knows what’s legal anymore.”
The criticism lands at a particularly awkward moment for the Trump administration, which in June directed the Commerce Department to slap export controls on Anthropic’s Fable 5 and Mythos 5 AI models over cybersecurity concerns. Those restrictions were lifted in early July, but the damage to business confidence was already done.
Export controls as a blunt instrument
Here’s the thing about Smith’s complaint: it’s not that he opposes AI regulation. He’s been one of Big Tech’s more vocal advocates for structured AI governance. Microsoft published a detailed five-point blueprint for public AI policy back in 2023. The issue is that the government appears to be improvising.
The Anthropic situation is a case study in regulatory whiplash. In June, the Commerce Department decided that Fable 5 and Mythos 5 posed enough of a security risk to restrict them worldwide. A few weeks later, the controls were gone.
