How The Repayment Assistance Plan (RAP) Works: Payments, Eligibility, And Forgiveness
How The Repayment Assistance Plan (RAP) Works: Payments, Eligibility, And Forgiveness
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Bond traders bet Fed under Warsh will hike rates this year
(Bloomberg) — Bond traders are fully pricing in an interest-rate hike by the Federal Reserve this year, a sign of conviction in the market that Chair Kevin Warsh will need to move quickly to combat inflation.
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Traders boosted their bets for higher rates on Friday after Fed Governor Christopher Waller — among the most dovish policymakers over the past year — said that based on the inflation trend, the central bank’s next policy statement should “make it clear that a rate cut is no more likely in the future than a rate increase.”
Interest-rate swaps repriced to levels anticipating that the Fed’s target range for its benchmark rate — 3.50%-3.75% since December — will be at least 25 basis points higher by the end of 2026, the first time such an outcome has been fully priced.
Waller’s comments halted a Treasury market rally, lifting the two-year note’s yield as much as six basis points to 4.14%, the highest level since February 2025. The US dollar rose.
“Waller’s latest remarks confirm the hawkish shift at the Fed,” Evercore ISI head of economics and central bank strategy Krishna Guha said in a note. “His discussion of inflation was across the board hawkish.”
The shift gathered pace at the most recent policy meeting in April, when three voters on the Federal Open Market Committee voted against the statement announcing the decision to hold rates steady because it also signaled that that the next move still could be a rate cut.
The dissenters favored a statement that didn’t mention the possibility of a cut. That was the course that Waller — who dissented from two Fed decisions to hold rates steady in the past year in favor of cutting them — backed in his speech.
Short-term interest rate markets fully pricing in a Fed rate increase is a complete turnaround from earlier this year, when President Donald Trump’s selection of Warsh — who was sworn in as the 17th Fed chair in a White House ceremony Friday — inspired Wall Street to bet on at least two quarter-point rate cuts in 2026. Traders began re-calibrating those wagers after the US and Israel attacked Iran in late February.
The resulting effective closure of the Strait of Hormuz disrupted Middle East oil exports, causing gasoline prices to surge. That has led to higher actual and expected inflation rates which, feeding through to other parts of the economy, could force a response from central banks. Sharp increases in energy and food prices in April drove a 3.8% year-on-year increase in the US consumer price index, the biggest since 2023.
Inflation Expectations
In the months leading up to his nomination, Warsh had criticized the Fed for not lowering rates enough and pointed to longer-term dynamics in the economy — namely an expected boom in productivity growth connected to artificial intelligence — that might justify cuts.
But he hasn’t aired his policy views in many weeks. During his confirmation hearing on April 21, lawmakers failed to press him for his near-term views on interest rates. While Trump at the swearing-in ceremony said Warsh should act independently, repeating a comment made earlier this week, as recently as last month he said he’d be disappointed if Warsh didn’t lower rates immediately upon taking the job.
The Fed’s next scheduled monetary policy announcement is on June 17, when policymakers are expected to hold rates steady. Minutes of the Fed’s April meeting released this week showed a majority of officials said the central bank would likely need to consider raising rates if inflation continued to run persistently above their 2% target.
What Bloomberg Strategists Say …
“As a leading proponent of rate reductions in the past, the fact that Waller is further distancing himself from cuts will be taken as a signal the central bank is giving up its dovish bias amid deepening concern about inflation.”
—Tatiana Darie, Macro Strategist Markets Live
Concurrently with Waller’s comments, a consumer sentiment survey by the University of Michigan showed that inflation expectations mounted in May. While they remain short of their 2025 highs, respondents’ expectations for inflation over the coming year and over the next five to 10 years increased more than anticipated, to 4.8% and 3.9% respectively.
Gains Erased
Treasury yields were near session lows just before Waller spoke, with the five- to 30-year tenors the lowest in a week. Signs that Iran and the US are close to a peace agreement provided a catalyst for investors to lock in yields near multiyear highs.
The US 30-year rate rose to 5.20% this week for the first time since 2007. It retreated to 5.06% Friday. UK, German and Japanese 30-year yields also reached multiyear highs.
While previous indications that a lasting agreement was imminent haven’t panned out, the potential for developments over the US three-day holiday weekend was a factor. US bond trading had an early close at 2 p.m. New York time, and Treasury futures contracts settled at 1 p.m., two hours earlier than normal.
“While the two sides appear to be a meaningful distance apart in their respective demands, the fact that there is an ongoing dialogue offers some solace,” said Ian Lyngen, head of US interest-rate strategy at BMO Capital Markets in New York. “There is significant event risk in the Middle East as we head into the long weekend.”
–With assistance from Edward Bolingbroke and Michael MacKenzie.
(Adds context in sixth and seventh paragraphs and updates yield levels.)
More stories like this are available on bloomberg.com
Education Department Sends SAVE Borrowers a “Courtesy” Warning Before July 1 Formal Notices Begin
The U.S. Department of Education has started emailing borrowers enrolled in the Saving on a Valuable Education (SAVE) Plan a second round of reminders (which we’re dubbing as “courtesy” notices) ahead of the formal transition emails set to start July 1, 2026.
Why it matters: Around 7 million borrowers are still sitting in SAVE forbearance after a federal court order killed the plan. Once a borrower’s servicer sends the official notice, a 90-day clock starts to pick a new repayment plan or the servicer will move the borrower into one automatically (likely the Standard Plan). Borrowers who still don’t resume payments will being the path towards default.
What The Notice Said
Here’s what the notice said to borrowers:
Our records show that you’re enrolled in the Saving on a Valuable Education (SAVE) Plan. As a reminder, a court order ended the SAVE Plan. You must select a new repayment plan, or your student loan servicer will move you into a different repayment plan.
In the coming months, your loan servicer will contact you about your specific deadline to choose a different repayment plan. Once you hear from your loan servicer, you’ll have 90 days to choose another repayment plan. This gives you time to select the plan that works best for you.
Our newest repayment plans—the Repayment Assistance Plan (RAP) and Tiered Standard Plan—will be available starting on July 1, 2026. Visit StudentAid.gov/bigupdates to learn more about these new repayment plans and other changes to the federal student aid programs.
If you don’t want to wait until July 1, 2026, you can choose a different repayment plan that fits your needs and goals now. Since our first email about the SAVE Plan ending, hundreds of thousands of borrowers have applied for a different plan.
If you are not enrolled in the SAVE Plan, did not submit an application for the SAVE Plan, already applied for a new repayment plan, or no longer have a balance on your federal student loans, you do not need to take any action.
Between the lines: It appears that the Department of Education is positioning this round of outreach as a soft warning before the formal 90-day countdown begins in July. Borrowers who wait until their servicer’s official notice arrives will have less time to compare options like IBR, RAP, and the new Tiered Standard Plan. Some borrowers may be blocked from plan like PAYE if they wait.
What to watch: July 1, 2026 is a big date: it’s the start of the official transition notices going out, and also when the two new repayment plans become available. Deadlines will stagger across borrower cohorts through the rest of 2026, with most borrowers expected to be back in active repayment by the end of September 2026. Our sources at the loan servicers have said that while the notices will be staggered, it’s likely that timeline will be “compressed”.
How this connects: The College Investor has tracked the SAVE transition since the court order ended the program. Our prior reporting on the SAVE forbearance ending lays out the 7 million borrower population, and our coverage of the 90-day auto-enrollment risk explains why borrowers shouldn’t ignore the courtesy email.
For readers weighing new repayment plan options, RAP and IBR will be the two most likely options. Borrowers should use a Student Loan Calculator and compare their choices now.
Bottom line: The courtesy email isn’t a deadline but it’s the likely one of the last warnings before the official deadline starts. Borrowers who pick a new plan now will have more control than those who wait for the formal notice.
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Editor: Colin Graves
The post Education Department Sends SAVE Borrowers a “Courtesy” Warning Before July 1 Formal Notices Begin appeared first on The College Investor.
Cerebras vs. Nvidia: Which AI Stock Is the Smarter Buy Right Now?
The dust is just settling on Cerebras‘ (CBRS 8.90%) impressive initial public offering (IPO), in which the stock price soared 68% on its first day of trading. If there were any lingering doubts about investor enthusiasm for artificial intelligence (AI) stocks, they’ve certainly been put to rest.
Cerebras’ large-wafer technology claims to be a game changer in AI processing, potentially more efficient than Nvidia‘s (NVDA 1.86%). While the jury is still out on its long-term impact on its rivals, Cerebras’ blockbuster IPO proved investors have high hopes.
So, with a new AI infrastructure play in town, should investors skip Nvidia stock for Cerebras right now? Here’s what investors should know.
Image source: Getty Images.
The case for betting Nvidia remains the center of the AI hardware universe
Before you cast Nvidia aside for a shiny, new stock, it’s important to take a quick look at why Nvidia has become the most valuable company in the world.
First, it dominates the graphics processing unit (GPU) market, thanks to its near-ubiquity in AI data centers. The latest data shows that Nvidia holds a phenomenal 86% of the AI data center market by revenue. Its competitors can only dream of that level of dominance.
Second, it’s still investing in new tech to keep itself at the top. Nvidia recently released its new Vera Rubin AI platform, which it says delivers 10x higher inference throughput per megawatt than its Blackwell processor platform at just one-tenth the token cost. And CEO Jensen Huang said recently demand for Vera Rubin and Blackwell will lead to $1 trillion in orders through next year.
Nvidia is benefiting right now from the investments it made in superior processors years ago. And companies are still clamoring for its tech, as Huang’s estimates suggest. With tech leaders including Alphabet, Meta Platforms, Amazon, Microsoft, and others on track to spend hundreds of billions of dollars this year alone in data center investments, Nvidia’s growth likely hasn’t peaked.
Today’s Change
(-1.86%) $-4.09
Current Price
$215.42
Key Data Points
Market Cap
$5.2T
Day’s Range
$214.84 – $221.07
52wk Range
$132.92 – $236.54
Volume
5.8M
Avg Vol
171.3M
Gross Margin
74.15%
Dividend Yield
0.02%
The case for catching Cerebras’ rising star
Having said all that, disruption is the name of the game in tech. New, innovative companies come along all the time and try to unseat the dominant ones. They’re not always successful, but when they are, investors can win big.
No one knows if Cerebras will become the next leading AI processor company, but it’s sure as heck trying. The company’s flagship product is its Wafer Scale Engine 3 (WSE-3), which is essentially a very large semiconductor that acts as one big chip, instead of hundreds of smaller ones.
Cerebras says the bigger silicon wafer gives it an advantage over Nvidia’s B200 package (which contains two processors), achieving 250 times more on-chip memory, and 2,625 times more memory bandwidth.
Speed and efficiency are the name of the game for AI right now, and some leading artificial intelligence companies are already buying into Cerebras’ claims. OpenAI signed a $20 billion deal with Cerebras for a multiyear compute capacity agreement, securing up to 750 megawatts of specialized AI infrastructure power and giving OpenAI a potential 11% equity stake in the chipmaker. OpenAI CEO Sam Altman was also an early investor in Cerebras.
Clearly, Cerebras is on to something with its tech. Faster AI and big tie-ins with leading artificial intelligence companies shouldn’t be dismissed.
Today’s Change
(-8.90%) $-25.08
Current Price
$256.78
Key Data Points
Market Cap
$56B
Day’s Range
$250.27 – $285.00
52wk Range
$185.00 – $386.34
Volume
11.8M
Avg Vol
12.7M
Gross Margin
39.03%
Verdict: Stick with Nvidia for now, but add Cerebras to your watch list
This might not be the outcome you wanted, but Nvidia is still the smarter AI play right now. What’s the reason? I’ve got four.
As in, Nvidia has more than 4 times Cerebras’ annual revenue. Nvidia had $216 billion in sales in its most recently completed year, compared to just $500 million for Cerebras. Oh, and Nvidia had about $117 billion in non-GAAP (adjusted) net income for the full fiscal year, compared to Cerebras’ non-GAAP net loss of $75 million in 2025.
In short, Nvidia generates far more revenue, is much more profitable, and is the reigning GPU market leader. Cerebras may have good tech, but as an investment right now, it’s still a very risky bet.
I understand why you might be getting hyped up about Cerebras and the idea of it unseating Nvidia in the AI semiconductor space. By all means, keep an eye on Cerebras. But if you’re buying an AI stock today, Nvidia should be your pick.
[Targeted] Target Circle 360: $10 Rewards for Every $100 Spent (Limit 5)
![[Targeted] Target Circle 360: $10 Rewards for Every $100 Spent (Limit 5)](https://globalinvestmentstrategy.com/wp-content/uploads/2026/05/target-circle.png "[Targeted] Target Circle 360: $10 Rewards for Every $100 Spent (Limit 5)")
Update 5/22/26: Available again for Memorial Day weekend.
Update 12/28/25: Deal is back again (ht Courtney)
Update 10/4/25: Now live, requires target circle 360 (non trial).
The Offer
Direct link to offer
- Target Circle is offering $10 Rewards for Every $100 Spent, up to 5x
Our Verdict
Might be useful to some people. Reports are that third party gift card purchases would typically count toward your spend.
Why Your Marketing Feels Broken (It’s Not the Tactics)
I’ve given this diagnosis so many times it has a name: Random Acts of Marketing.SEO aimed at one audience. Paid ads targeting another. The website describes the business differently than the founder does in a sales call. The content sounds like it came from a different company than the pitch deck. Everything is technically running. Nothing is working together.
This is the most common condition in small business marketing. And it’s almost never caused by lack of effort or thin budgets. It’s caused by the absence of a strategic foundation the tactics can actually build on.
What founders mistake for strategy
Most founders with a tactics problem think they have a strategy. They almost never do.
What they have is a list of tactics they’re running, opinions about each one, and a history of what did and didn’t work. That’s not a strategy. A strategy is a coherent answer to three questions:
Who exactly are we for? What do we do that the alternatives don’t? What’s the one sentence that ties those two things together?
Without those answers, the tactics underneath can’t compound. They just take turns failing.
Strategy First: the three pieces
The strategic foundation has three parts. All three have to exist. Any one of them alone isn’t enough.
The ideal client
A persona isn’t an ideal client. A demographic isn’t an ideal client. “Small business owners between 35 and 55 who value quality” is a description, not a strategy.
An ideal client is a specific type of customer, in a specific situation, whose problem you’re uniquely positioned to solve better than the real alternatives they’re actually considering.
Here’s what specificity looks like in practice: a home services company whose ideal client is “owners of 20-plus-year-old homes in zip codes where houses sell for over $800,000, who’ve lived there more than 3 years and are thinking about aging in place.” That’s a strategy. Every downstream decision, where they advertise, what their photos show, how they price, what they stop offering, can align to that specific person.
The riches are in the niches. That was true when I wrote the original Duct Tape Marketing. It’s more true now. In a market where AI makes it trivially easy to produce generic content for generic audiences, the only marketing that gets through is the marketing clearly made for someone specific.
Differentiation
Two mistakes come up constantly. Claiming differentiation that isn’t actually different (quality, service, experience: every business claims these). And describing differentiation against the wrong competitor.
Your customer is rarely choosing between you and the obvious direct competitor. They’re choosing between you and doing nothing, a different category of solution, or doing it themselves. Your differentiation has to land against that actual set of alternatives.
Differentiation is also a commitment. If you claim to be the firm that does the deepest strategic work before any execution, you can’t also take an emergency project on Monday and deliver by Friday. The claim requires you to turn down certain work. That’s the real test: does your differentiation require you to say no to something?
The core message
One sentence. In the customer’s language. Describes who you’re for and why they’re in the right place.
It has to pass 3 tests. Clear (a smart 12-year-old should understand who you serve and what you do). Different (it can’t be lifted and pasted onto a competitor’s site without anyone noticing). Credible (the customer believes it).
Clever is a tagline. The core message is clear. They can be the same thing. They usually aren’t.
The Marketing Hourglass
Strategy First also gives you the diagnostic lens you’ll use for everything that comes next: the Marketing Hourglass.
Most people were taught to think about the customer journey as a funnel. Leads in the top, customers out the bottom. It’s useful for a narrow slice of the work and dangerously incomplete for the whole picture.
Real growth for small businesses happens inside an hourglass, because the most valuable customer activity happens after the sale. The 7 stages: Know, Like, Trust, Try, Buy, Repeat, Refer. The hourglass widens again after Buy. That’s the part most small businesses ignore, and it’s where the highest-value growth actually lives.
The diagnostic is simple: find the stage where things are leaking and fix it before you build anything new on top.
One thing to do this week
Write your core message. One sentence. Customer’s language. Run it through the 3 tests: clear, different, credible.
If it can’t pass all three, that’s the strategy work. Everything else waits until it does.
This is step two of a seven-step system I’ve been refining for over 20 years. The full framework is in my new ebook, “7 Steps to Small Business Marketing Success.” Get it at dtm.world/7steps.
Three Risks of Relying on the S&P 500 in Retirement Planning
The analysis is based on rolling monthly 15-year windows from 1965 to 2025 and could be improved in future research using moment-match parametric Monte Carlo simulations or bootstrapping from observed returns.
Future research could also incorporate longer time horizons, multi-factor portfolios, additional asset classes, dynamic withdrawal policies, and regime-based risk management techniques.
Distributions were set as a percentage of the portfolio as opposed to a hard initial dollar amount, both practical and behaviorally driven. However, there are many other acceptable and commonly used ways to take distributions, like the most common 4% starting amount, then linearly adjusted for inflation (CPI). Future research could investigate how various portfolio designs affect the different withdrawal methods.
Appendix & Citations
Data Source: Compustat.
Calculation: Hartford Equity Modeling Platform.
U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: All Items Less Food and Energy in U.S. City Average [CPILFESL], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CPILFESL, January 9, 2026.
Style Definitions:
Top 500 Value: US top 500 stocks top 30% based on composite value as defined by multiple equally weighted valuation metrics to arrive at an aggregated valuation metric. Valuation metrics include: P/E, EBITDA/EV, operating cash flow/EV, revenue/EV, and B/P Yield (used only in financials and real estate as a replacement to EBITDA/EV), then cap weighted.
Top 500 Low Volatility: US Top 500 Stocks top 30% based on a composite volatility score defined by multiple equality weighted volatility metrics to arrive at an aggregated volatility metric. Volatility metrics include three-year weekly beta and six-month daily standard deviation, then cap weighted.
Top 500 Low Volatility VMQ: US Top 500 Stocks top 50% based on a composite volatility score defined by multiple equality weighted volatility metrics to arrive at an aggregated volatility metric. Volatility metrics include three-year weekly beta and six-month daily standard deviation, then cap weighted. Then top 50% based on combined score of 50% value, 30% momentum and 20% quality. Combined scores for financial and real estate sector companies are assigned weightings of 65% Value and 35% Momentum. Composite value as defined by multiple equally weighted valuation metrics to arrive at an aggregated valuation metric. Valuation metrics include: P/E, EBITDA/EV, operating cash flow/EV, revenue/EV, and B/P Yield (used only in financials and real estate as a replacement to EBITDA/EV), then cap weighted. Composite momentum equally weights Last 12 ex-1 monthly returns and last 6 ex-1 monthly returns to arrive at an aggregated momentum metric. Composite quality uses gross profitability to total assets.
Top 500 Growth: US top 500 stocks top 30% based on five years sales growth, then cap weighted.
Top 500 Cap Weighted: US Top 500 stocks, cap weighted.
Top 500 Equal Weighted: US Top 500 stocks, equal weighted.
Will Mortgage Rates Hit 7% Again?
With mortgage rates on the rise again, it’s a logical question to ask: Will mortgage rates hit 7% again?
It’d definitely be a gut-punch for prospective home buyers, though I don’t know if it would derail them entirely.
Recently, I pushed back on this return to 7% narrative since some folks will use the highest possible readings to say mortgage rates are already there.
This happens a lot on social media. A post will claim rates are the highest since X date, with some random mortgage rate chart that doesn’t reflect reality.
But now it’s kind of true. The 30-year fixed got as high as 6.75% the other day, meaning it’s only about .25% away from a 7-handle again.
We Had 7% Mortgage Rates Almost Exactly a Year Ago
We’ve seen this movie before. The recent rise in mortgage rates driven by sticky inflation and geopolitical concerns.
The weirdest part for me was how long it took. We knew things were bad in the Middle East, yet rates stayed put and even fell in April on some sort of blind optimism.
It wasn’t until the past few weeks, and especially the last week, that mortgage rates finally faced the music.
Now that fear-mongering I was referring to using charts that make mortgage rates look as high as possible might not be so far-fetched.
If rates continue to feel the pressure, it won’t take too much more to get them back in the 7s.
And recall that it wasn’t that long ago that we were there. Sure, we had a sub-6% rate at the end of February and early March of this year (seems like a distant memory now).
But we also had a 7-handle 30-year fixed as recently as last May!
Yep, almost literally a year ago the 30-year fixed stood at 7.02%, according to Mortgage News Daily.
So it’s not out of the realm to revisit those levels, especially if we have good reason to.
With oil continuing to trade at more than $100 per barrel and no sign of a peace deal anytime soon, why wouldn’t mortgage rates keep going up? Or put another way, why would they fall?
What Keeps Us Below 7%?
Still though, they’d have to rise another quarter-percent from here and they’ve already climbed quite a bit.
So one could argue that a lot of the high cost of oil and sticky inflation is baked in to some degree.
You’d need more pessimism and high inflation readings to see mortgage rates continue to climb.
I hope we don’t revisit 7% mortgage rates because it seemed they were finally behind us.
But that was before the Iranian conflict surprised us all. So I’m a bit more cautious today than I was to start the year.
What I kind of see playing out is a temporary spike to 7% (or very close) that could happen if bond investors continue to fret about current conditions.
That is, stubborn and even worsening inflation, renewed global tensions, and hot economic data such as resilient labor.
There’s been a lot of talk lately about rate hikes, with rate cuts apparently completely off the table.
It probably wouldn’t last long, but even a brief visit would be enough to scare home buyers and slow the housing market to a crawl, especially in markets with excess inventory and high prices.
However, this isn’t a guarantee and the data could surprise us. Maybe jobs data comes in colder than expected…
Favorable Spreads Make It Harder to Hit 7% Today
And remember that mortgage spreads are a lot better today, so even with higher bond yields, we have lower mortgage rates.
I don’t really see spreads worsening because they were wide mostly due to prepayment risk.
And with mortgage rates more or less in a range now, there’s less of that fear of everyone refinancing their mortgages quickly.
That means it’s actually harder for mortgage rates to rise above 7% again today.
If we assume a spread of around 210 basis points above the 10-year treasury, you’d need it to rise to roughly 4.90% to get a 7%+ 30-year fixed.
It’s currently around 4.57%, meaning it’d need to come up quite a bit for us to surpass 7%.
So that’s one thing we’ve got on our side as mortgage rates perhaps flirt with the idea of the 7s again.
But either way though, I expect rates to rise above their year-ago levels, serving as yet another gut-punch and psychological hit.
Read on: Check out my mortgage rate calculator to see what even an eighth of a point can make on your home loan.
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.
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Tech billionaires convinced Trump to back off AI executive order
The tech bros struck back.
That’s the best way to describe what happened yesterday when President Donald Trump suddenly decided to indefinitely postpone signing an Executive Order on AI, even as technology company executives he had invited to be present at the White House for the signing were traveling to Washington for the ceremony.
“I didn’t like certain aspects of it,” Trump explained to reporters at the White House on Thursday morning. “I think it gets in the way of—we’re leading China. We’re leading everybody, and I don’t want to do anything that’s going to get in the way of that.”
The order would have created a system in which AI companies could voluntarily submit their most advanced models to key national security agencies for testing and vetting up to 90 days prior to releasing them. Officials from multiple government departments and agencies had spent weeks negotiating over the executive order’s language, and leading AI companies had been briefed on its content. At least two of those companies, Anthropic and OpenAI, had indicated they were in favor of the voluntary vetting system.
David Sacks, Elon Musk, and Mark Zuckerberg led last-minute push
The executive order was under consideration following the debut of Anthropic’s Mythos model, which possesses unprecedented cyber capabilities. The AI company has voluntarily limited Mythos’ release out of concern that those capabilities, if widely shared, could help hackers to launch devastating cyber attacks against critical infrastructure.
But David Sacks, the Silicon Valley venture capitalist who stepped down in late March as Trump’s AI and crypto czar, successfully mounted a last-ditch lobbying effort to derail the order’s signing. Sacks called Trump on Thursday to express his concerns, according to press accounts. The campaign also included similar calls to Trump from Elon Musk and Mark Zuckerberg, both of whom are developing advanced AI models. There were also, reportedly, efforts to convince members of Vice President JD Vance’s staff to voice concerns about the order with Trump.
Sacks is a prominent AI “accelerationist” who believes that any federal regulation will harm U.S innovation, hurt the business interests of U.S. technology companies, and delay the country from experiencing the many benefits he believes AI will bring. He also sees the U.S. as being in a potentially existential race with China to develop advanced AI capabilities, and believes that regulation will result in the U.S. falling behind in this geopolitical contest.
Although no longer officially serving as Trump’s AI advisor, Sacks continues to wield influence on the administration’s AI policy. Earlier this week, according to news reports, he attended official briefings on the executive order. At the time, he reportedly indicated he would not oppose the voluntary model testing framework.
But, according to a story in Politico, Sacks later told Trump that he feared the voluntary vetting would act as a de facto licensing regime, slowing down AI companies’ releases of new AI models. He also worried, Politico reported, that a future administration might easily turn the voluntary procedure into a mandatory one.
Trump’s decision to postpone signing the order leaves U.S. AI policy in a strange place both in terms of policy and politics. AI regulation is an issue which splits Trump’s base. Trump came into office supported by a cadre of “move fast and break things” Silicon Valley billionaires, including Sacks and Musk. They have expressed admiration for the president for tearing down what they see as unnecessary red tape and bureaucracy, and for embracing crypto currency. Zuckerberg, who was a critic of Trump during his first term as president, has in the past year emerged as a vocal supporter.
Americans, largely, want some AI regulation
Prior to Trump’s decision to pull out of signing the executive order, many in Washington thought the order was a done deal and that the forces opposing the approach were in retreat. Poll after poll indicates that the majority of Americans—including a majority of Republicans—are fearful about AI’s impact on jobs and its potential negative impacts on education and children’s mental health. Many oppose the construction of data centers near them. And many religious Christians are deeply suspicious of AI, viewing the technology as a kind of “false god,” equivalent to idolatry.
Former Trump advisor Steve Bannon, for instance, was among more than 60 MAGA loyalists who earlier this week signed an open letter to Trump urging him to test and approve powerful AI models before they are released. The letter was organized by Humans First, a conservative group whose tagline is “technology should serve humans…not replace them.”
A poll of Republican voters released today by the Future of Life Institute, an AI safety group concerned with AI’s potential existential risk to humanity, found that 79% were in favor of the government testing AI models before they are released to ensure they are safe, and that 87% favored the government having the power to block the release of AI models that pose a national security threat.
“Our image and the stereotype is that Republicans are against regulation,” Michael Kleinman, head of U.S. policy for the Future of Life Institute, told Fortune. “But what we are finding instead is when people see a technology that has direct and often incredibly negative impact on their lives, their kids, and their communities, they want the government to step in and put in place common sense guardrails.”
U.S. policy remains fragmented on advanced AI models like Mythos
Kleinman said that while Sacks and the Silicon Valley faction of Trump’s base have prevailed for now, public opinion and the trends in AI development were against them. “Public opinion is solidifying on both the left and the right,” he said. “Mythos won’t be the last model that these companies release that will pose significant national security threats—it is the first such model. So the pressure is only going to continue to build for the government to take common sense action.”
The Trump administration is, for the moment, continuing to exercise a kind of ad hoc licensing process for just that one AI model, Anthropic’s Mythos. Anthropic has shared the model with the U.S. government and, under what Anthropic calls Project Glasswing, with a select handful of U.S. technology companies and financial institutions who make software that underpins much of the internet and other critical infrastructure. But the White House, according to press reports, blocked Anthropic from expanding the number of companies with access to Mythos due to national security concerns.
Meanwhile, OpenAI has created an AI model, GPT-5.5, that—according to OpenAI’s own testing and that carried out by the U.K. government’s AI Security Institute—is almost as capable as Mythos. OpenAI has released the model only to partners in a “trusted access” program, although the program is less limited than Anthropic’s Glasswing. The U.S. government has not applied the same scrutiny to the expansion of OpenAI’s trusted access program for GPT-5.5 as it has to Glasswing.
A number of AI companies also voluntarily share their most advanced AI models with the Center for AI Standards and Innovation (CAISI), which evaluates them for some potential risks. But CAISI is part of the Department of Commerce and its experts do not necessarily have access to classified information to help them assess the risks AI models pose, or the expertise in advanced cyber security methods that parts of the U.S. national security establishment have.
The discussion over the now-postponed executive order, according to a story in The Washington Post, involved heated wrangling between different branches of the U.S. government over who should be in charge of testing and approving AI models. The Commerce Department wanted to hold on to its leadership on model evaluation with the CAISI, but the U.S. intelligence community was also vying for responsibility. Meanwhile, it is Treasury Secretary Scott Bessent who has been leading much of the administration’s response to Mythos so far.
There were also disputes between factions of Trump advisors. Kevin Hassett, the director of the National Economic Council, suggested last week that the administration would set up a licensing system similar to how the Food and Drug Administration reviews testing of drugs before approving them for sale. That brought a rebuke on social media from White House Chief of Staff Susie Wiles, who said the president was not “in the business of picking winners and losers.”