Russ Vought, Donald Trump’s pick to lead the Office of Management and Budget, has sure been keeping busy.
Elon Musk’s DOGE has tag-teamed with the office he oversees, the OMB, as well as the Office of Personnel Management, for approvals and spending cuts in the last few months. Musk and Vought have, behind the scenes, apparently become quite the duo—collaborating on a cost slashing effort that is reshaping some federal agencies.
As part of these efficiency efforts, Vought sent out a couple memos to all the federal agencies last week, laying out this administration’s new AI policies for the government. The memos specified how federal agencies should adopt and try to incorporate AI within their respective organizations, and rolled back rules established in a 2024 Biden-administration memo—something Trump had instructed the agency to do earlier this year via an executive order.
These new policies understandably got lost in all the recent noise around Trump’s tariffs and the stock market carnage. But these memos are worth pointing out. They are the first guidance on AI coming from Trump’s administration since he issued an executive order at the end of January, tasking federal agencies to revise or pull back policies inconsistent with his own goals.
The new memos instruct U.S. agencies to prioritize AI products built in the U.S. and remove some of the safety requirements that had been in place under Biden. It also allows agencies to use pre-existing approval processes they had for other government IT, meaning that government agencies may—theoretically—be able to streamline the adoption process and start using AI tools more quickly.
This isn’t specific to generative AI, and it definitely doesn’t mean that each agency is going to start using Grok, like DOGE has apparently been doing. But it formulizes some of the Trump administration’s priorities and messaging around AI, creating a template that could hint at what’s to come as we await the administration’s broader AI policy.
The biggest differences between Vought’s new memos and Biden’s OMB memo lie in the approach to risk, according to Gordon Bitko, executive vice president of policy of the Information Technology Industry Council, a trade organization representing the tech industry. The new memos make the argument that “failure to innovate and implement AI at scale in the government” is actually a “bigger risk than improper use of AI,” Bitko told me in an email. (This “risk of not acting” argument has echoes of Marc Andreessen’s 2023 manifesto on AI risk, though Andreessen argued that the biggest risk of inaction was losing the AI race to China.)
While the Biden-era OMB memo focused on potential impact to rights or safety of citizens, Vought’s memo gives agencies more flexibility to decide for themselves what would be considered a “higher-impact” AI use case—evaluate risks for themselves and handle it accordingly. Bitko calls them “less prescriptive,” in that it appears that agencies will have more discretion in how they document their impact assessments and testing.
The new memos also emphasize for the first time that agencies must prioritize AI products built in the U.S., in keeping with Trump’s “America First” approach.
But apart from these items, these two new memos actually have a lot in common with the Biden memo that went out last year, and they actually maintain a lot of Biden-era guidance. The new memos continue to require agencies to have Chief AI Officers, to track how the agencies are using AI, develop policies to remove barriers for implementing AI, and publish their compliance plans on agency websites. None of that will change under Trump—or at least, not yet.
Since the original OMB memo in 2024, 86% of the federal government’s 266 agencies have complied and submitted AI compliance plans to the OMB, according to a report published by Stanford University that evaluated compliance. As of the end of January, 41 federal agencies were experimenting with AI or machine learning tools—using them for 2,133 different use cases, according to an OMB inventory Trump started mandating during his first term in office—showcasing much wider adoption of artificial intelligence within the federal government since the end of 2023, when there were only 700 use cases.
Government agencies have started using AI for a range of interesting tasks. Some highlights: identifying and analyzing pulmonary nodules in lung cancer screening exams at the Department of Veteran Affairs; analyzing the impact of illicit drugs on communities and individuals in Department of Justice drug trafficking investigations; and navigating the Mars 2020 Rover from Earth at NASA.
See you tomorrow,
Jessica Mathews
X: @jessicakmathews
Email: jessica.mathews@fortune.com
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VENTURE DEALS
- Sipay, an Istanbul, Turkey-based financial services platform, raised $78 million in Series B funding at a valuation of $875 million. Elephant VC led the round and was joined by QuantumLight.
- Rain, a Santa Monica-based earned wage access platform, raised $75 million in Series B funding. Prosus led the round and was joined by Nextalia Ventures, Spark Growth Ventures, and existing investors QED, Invus Opportunities, and others.
- Arena, a New York City-based hardware testing and optimization AI platform, raised $30 million in Series B funding. Fifth Down Capital, Initialized, and Goldcrest Capital led the round and were joined by existing investors Founders Fund, Shield Capital, and Friends and Family Capital.
- Starday, a Scottsdale-based AI-powered food brand launch and development company, raised $8 million in Series A funding. Slow Ventures and Equal Ventures led the round and was joined by Vinyl Capital, Hannah Gray, Fearless Fund, Heirloom Capital Partners, and others.
- HoneyHive, a New York City-based AI agent observability and evaluation platform, raised $7.4 million in funding. Insight Partners led the $5.5 million seed round and was joined by Zero Prime Ventures, 468 Capital, and MVP Ventures. Zero Prime Ventures led the $1.9 million pre-seed round and was joined by AIX Ventures, Firestreak Ventures, and angel investors.
- Ryft, a Manchester, England-based automated payment platform for marketplaces and digital platforms, raised £5.7 million ($7.3 million) in Series A funding. EdenBase led the round and was joined by GPOS Investments, British Business Bank, Pembroke VCT, angel investors, and others.
- Haball, a Karachi-based supply chain financing and payments platform, raised $5 million in funding. Zayn VC led the round and was joined by Majlis Advisory SPV, angel investors, and others.
- Spektion, an Austin-based software vulnerability management company, raised $5 million in seed funding. LiveOak Ventures led the round and was joined by Tau Ventures and Dauntless Ventures.
- Adaptis, a Toronto-based decarbonization solutions provider for building owners, raised $4 million in seed funding. Building Ventures led the round and was joined by MetaProp, 2048 Ventures, Powerhouse Ventures, and Blue Vision Capital.
- OSSTEC, a London-based 3D-printed joint replacement implants developer, raised £2.5 million ($3.2 million) in funding. Empirical Ventures led the round and was joined by Oxford Innovation Finance, SFC Capital, Embryo Ventures, and Mishcon de Reya.
PRIVATE EQUITY
- Fenix Parts, backed by Stellex Capital Management, acquired Assured Auto Parts, a San Antonio-based automotive parts recycler and reseller. Financial terms were not disclosed.
EXITS
- Western Union agreed to acquire eurochange, a Stevenage, England-based foreign exchange services provider, from Corsair Capital. Financial terms were not disclosed.
OTHER
- Infineon Technologies agreed to acquire the automotive ethernet business of Marvell Technology, a Santa Clara, Calif.-based semiconductor developer, for $2.5 billion in cash.
- DNSFilter acquired Zorus, a Tampa-based DNS filtering cybersecurity company. Financial terms were not disclosed.
FUNDS + FUNDS OF FUNDS
- Excelsior Energy Capital, an Excelsior, Minn.-based investment firm, raised $1 billion for its second fund focused on solar, energy storage, wind, and other energy transition projects in the U.S.
PEOPLE
- Felicis, a Menlo Park, Calif.-based venture capital firm, promoted James Detweiler to partner.
- Upfront Ventures, a Los Angeles-based venture capital firm, promoted Jacques Sisteron, Kesar Varma, and Peter Zakin to partner.