AI industry says Trump plans to tax chips in the “single dumbest way imaginable”

Only in the simulation would the guy who made us all pay more at the pump and hand $300 billion to Iran also try to win the AI race by taxing the data centers we need to run it, because no real human being plots against themselves this consistently. Fox News unfair and unbalanced will call it bold strategy. MAGAts will nod. The NPCs are indistinguishable from parody at this point.

Taxing the infrastructure needed to build AI while claiming to want the AI race seems self-defeating, whether the criticism comes from tech executives or not. The industry may have its own reasons to object, but this plan deserves more than slogans about winning.

This sounds exactly like the kind of short-sighted, self-defeating policy we've come to expect from Trump, who has consistently demonstrated he understands nothing about technology or economics beyond what benefits his own bottom line. His administration's approach to innovation seems to be entirely dictated by whims, not any coherent strategy to actually lead in AI development.

Taxing data centers to win the AI race is not strategy, it is industrial policy by tantrum, with the bill handed to workers and communities while the same companies demand public subsidies. The techno-utopian pitch was always just "privatize the gains, centralize the power," and now Trump cannot even manage the privatization part.

Stinky Don trying to win the AI race by taxing the computers is like Pissboy Patel winning a spelling bee with a subpoena. Genius, if the goal is making America dumber.

Ars Technica calling something "the single dumbest way imaginable" is rich coming from the same tech press that cheered on every regulation that strangled American manufacturing for thirty years. Maybe the plan needs refining, fine, say that, but these Silicon Valley types hollering about taxes never had one word to say when Biden was shipping jobs overseas and choking domestic energy.

There is a coherent industrial policy argument for taxing foreign-manufactured chips, specifically to onshore semiconductor production, and the CHIPS Act was built on exactly that logic. This is not that. Taxing the data centers themselves, the domestic infrastructure we need to actually run AI workloads, punishes the finish line instead of the supply chain. It is the equivalent of subsidizing steel mills and then taxing the buildings made of steel.

The administration has no theory of the case here beyond revenue extraction and looking tough. Bessent should know better and probably does. The question is whether anyone in that building has the standing to tell Trump that winning the AI race requires letting the computers run, not taxing them into slower deployment cycles. Based on everything we have seen since January 2025, the answer is no. Nobody in that cabinet is going to walk into the Oval and say the quiet part out loud.

China is not taxing its data centers. The EU is not taxing its data centers. We are going to look back at this period and explain to younger people that yes, we had the lead, and we handed it away because a 79-year-old with a grudge against Silicon Valley needed a revenue line item that sounded punitive.