Bessent denies the labs a liability waiver and pushes open models
Two AI-policy answers landed in the same Washington hearing: what the frontier labs cannot have, and what the Treasury Secretary wants built instead.
Treasury Secretary Scott Bessent told the House Financial Services Committee on Tuesday that the government should not give AI companies a liability exemption, and that the United States needs to build more open models of its own. "I can tell you what we shouldn't do on safety is give these labs a liability exemption, which is what they're asking for," Bessent said, arguing that "the best way to guarantee safety is that the creators are liable for what they build and generate," and that the industry's position reduces to "we would like to all slow down, but please give us a waiver on liability." He told both chambers not to consider one: "The one thing we should not do is give them a blank check on liability." His second answer was industrial rather than regulatory — "we need to develop more open source models in the U.S. We can't let these large labs have regulatory capture because that will stop innovation" — which puts the Treasury on the same side as the open-weights camp in a fight the labs have been framing as a safety question.
Bessent also carried an allegation into the hearing: "Kimi had a breach and sent Chinese weapons plans back to Anthropic," he said, a reference to Anthropic's September threat-intelligence report, which alleged that Moonshot routed some Kimi users' queries through Claude. Anthropic did not immediately respond to a request for comment. On the distillation argument, his version was blunt — "the technical word for stealing and copying American AI models is distillation," and a lab that copies homework "can never get a higher grade" — with the policy conclusion that American open models would eventually crowd Chinese ones out of the market.
The tell is which item of the labs' wish list Bessent refused. A slowdown costs a lab revenue it can measure, but a liability exemption is the one ask that transfers risk to everyone else, and refusing it is free for a politician. It also matches where the rest of the administration has landed in the past week: the FTC chair called the safety-for-antitrust trade a request for "barriers to entry," and the President spent Monday telling a live audience that safety fears are a hoax. The labs are asking two branches of government for two different things — cover for coordinating, and a federal framework that binds their rivals — and both answers so far have been no. We tracked the antitrust half of that ask — FTC chair is 'deeply suspicious' of the labs' antitrust ask.
More than 100 people rallied outside Philadelphia's City Hall on Monday to launch a campaign against data centers, and the argument they are making is about pollution, bills and noise rather than about models. The No Data Centers in Philly campaign was organized in a city still living with the aftermath of its refinery — Philadelphia Energy Solutions, its largest, closed in 2019 after an explosion — and Philly Thrive's Sonya Sanders made the connection explicit: "We don't want the pollution, we don't want the noise, and we know they're not going to bring us more jobs." Two sites are already in play in the city. In New York, Governor Kathy Hochul put the same test in policy language at a press conference: "Progress shouldn't arrive with a higher utility bill, deleted water supply, or noise pollution. These data centers can only be built, should only be built in places that want them."
The pattern is repeatable because the objections are local and identical everywhere: Denver, Indianapolis, Asheville, Charlotte and Reno have all put moratoria on new builds in front of councils this year, and a Gallup poll this year found a majority of Americans opposed to data centers near where they live. TechCrunch's framing is the sharper one — opposition burns hottest in towns that already paid for heavy industry once. For the industry, that is a worse problem than a permit fight, because the opposition is not against AI, it is against being asked twice. We looked at the demand side of the same argument — AI data centers will out-burn Germany and Japan on gas by 2035.
What to watch: whether the FRONTIER Act's preemption clause and Treasury's open-model push end up in the same bill, and whether any of the labs answers Bessent's liability refusal on the record.
If liability is the one safety lever that costs the labs real money, why is refusing it the easiest answer in Washington? Tell us in the comments.
