The competitive frame for artificial intelligence is a two-player problem, and Washington is currently solving only one side of it. President Donald Trump's anti-regulatory approach to AI builds from a domestic logic: reduce regulatory friction and American development accelerates. The gap in that reasoning is that China is catching up regardless.
Where the deregulation frame runs short
Deregulation as a competitive strategy assumes the rival is held back by something similar to what you are removing. The mechanism behind regulatory friction, in the US context, is a constraint on development speed and deployment. Remove it, and the assumption is that the US pulls ahead.
What that frame misses is the constraint on China's side of the ledger. Xi Jinping's position in the AI race does not appear to be a function of regulatory burden in the Western sense. China's trajectory is being set by a different set of inputs, and those inputs are producing a catch-up dynamic that Trump's deregulatory posture does not address.
The Xi edge over Trump on AI comes down to a specific failure mode in the current US position: treating deregulation as sufficient when the competitive variable is the rival's pace, not the regulator's footprint. A domestic policy optimized for domestic friction cannot close a gap that is opening on foreign terms.