The Director of National Intelligence will now oversee artificial intelligence policy. The man whose job involves reading classified briefings about foreign threats gets to decide how chatbots work.
Jay Clayton ran the SEC from 2017 to 2020. He knows securities law. He presumably knows what insider trading is. Whether he can explain a neural network or describe the difference between supervised and unsupervised learning remains an open question. But he's the AI czar now, so every tech company building large language models answers to a guy who spent his career prosecuting pump-and-dump schemes.
This makes perfect sense if you think about it for zero seconds. The intelligence community loves surveillance. AI companies love data. Combine them and you get a marriage built on mutual suspicion and the shared belief that privacy died in 2007.
Retail traders will somehow find a way to lose money on this news. They'll buy call options on defense contractors with AI divisions. They'll convince themselves that Palantir is about to moon because a former securities regulator now has a title with the word intelligence in it. They'll check their portfolios in three weeks and wonder why $PLTR dropped 18% after a Morgan Stanley downgrade they didn't read.
The administration could have picked someone with a background in machine learning. They could have chosen a researcher who published papers on transformer architectures or alignment theory. Instead they picked a lawyer who knows how to read financial disclosures. Now he's in charge of the technology that might replace every knowledge worker in America.
Clayton's first day on the job will involve a briefing deck with 47 slides about Large Language Models. By slide six he'll realize he's completely f*cked. By slide twelve he'll start nodding confidently anyway. By the end he'll announce a task force, and some 24-year-old coder at OpenAI will keep shipping models that make the whole thing irrelevant.
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