US president-elect Donald Trump’s return has sparked discussions about the future of Taiwan-US relations, while the issue of artificial intelligence (AI) remains relatively overlooked. His second term is expected to spark significant shifts in the AI landscape, balancing innovation with managing AI’s societal risks. Trump’s deregulatory stance on AI could have far-reaching implications for Taiwan, a global AI leader thanks to its world-leading semiconductor industry, presenting challenges and opportunities.
Trump is likely to amend US President Biden’s executive order on AI issued last year, which emphasized oversight mechanisms such as the US AI Safety Institute, requiring safety testing and reporting by AI developers.
Trump is anticipated to focus on deregulation to boost investment and innovation, aligning with the views of ally Elon Musk. Musk’s nuanced stance on AI regulation — advocating selective safety standards for existential threats without broad regulatory burdens — could shape Trump’s approach.
The global AI race, especially as it relates to competition with China, is expected to dominate Trump’s strategy. His administration would likely intensify export controls on advanced semiconductors and AI-enabling technologies to stifle China’s access.
Trump would aim to secure US dominance in AI. Taiwan Semiconductor Manufacturing Co (TSMC), the jewel of Taiwan’s tech sector, would remain a linchpin in this competition. TSMC’s advanced chips are essential for training and deploying AI systems, positioning Taiwan as a critical ally for the US.
However, tighter export controls could restrict Taiwanese firms’ access to customers in China, a key market, forcing Taiwan to balance economic ties with China against its strategic alignment with the US.
Meanwhile, Taiwan has been building its AI ecosystem through initiatives such as the “AI Taiwan Action Plan,” designating AI as one of the “five trusted industries.” The efforts aim to transform Taiwan into a global AI hub.
Taiwan has made significant investments in encouraging AI talent, developing high-value applications and ensuring ethical governance. The nation is positioning itself as a trusted partner in the global AI ecosystem.
Trump’s deregulatory approach might shift global AI governance. While Taiwan’s ethical approach aligns with frameworks such as the EU AI Act, adopting less stringent US standards could allow Taiwan to bypass some regulatory barriers, accelerating AI innovation, especially in defense.
That flexibility might facilitate developing and deploying fully autonomous weapons systems. However, as a democratic nation, Taiwan must balance rapid technological advancement with ethical considerations.
Trump’s AI policies are likely to spur investment in defense technologies. Closer alignment with the US on military AI could bolster Taiwan’s defense capabilities.
For Taiwan, Trump’s presidency presents a mix of challenges and opportunities. As Trump’s incoming administration prioritizes deregulation and innovation, the nation must navigate the complexities of US policy shifts and its own geopolitical realities. By leveraging its semiconductor strengths, advancing partnerships and balancing ethical imperatives, Taiwan can solidify its role in global AI innovation. Trump’s return underscores the need for Taiwan to adapt strategically, taking advantage of deregulation-driven growth, while addressing the geopolitical and ethical complexities of an AI-driven future.
Harun Talha Ayanoglu is a research associate at the Taiwan Center for Security Studies.
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