Oct 25, 2026 · 34 min
AI rules could reshape markets before Washington acts
How AI Regulation Could Help the Public—and Investors Too
The episode connects stalled federal oversight to investor risk, public distrust, corporate liability, and the durability of AI innovation.
- 1Federal AI regulation appears likely but remains constrained by congressional gridlock, legal limits, and the absence of comprehensive privacy legislation.
- 2AI infrastructure financing and circular ownership are creating credit, competition, and economic-resiliency risks for investors and markets.
- 3Jonathan Kanter argues that duties of care and loyalty could make AI safer without preventing commercially valuable innovation.
Don't miss
Jonathan Kanter argues that regulation could have produced better technology by requiring stronger safety, privacy, and mental-health protections.
The brief
Telis Demos and Miriam Gottfried examine whether AI leaders’ calls to slow down reflect genuine safety concerns, strategic market signaling, or coordination among competitors.
The hosts connect SpaceX’s AI ambitions and rising infrastructure spending to a young, volatile debt market involving neocloud companies and chip financing.
Jonathan Kanter argues that federal AI rules are inevitable but not imminent, with congressional weakness, the Supreme Court’s major-questions doctrine, and missing privacy legislation slowing action.
Kanter’s proposed starting point is duties of care and loyalty: AI companies should protect safety, security, privacy, and creators’ rights, while agents owe obligations to users.
The sharpest tension arrives when liability meets innovation: Kanter says established product-responsibility principles can adapt to autonomous systems rather than leaving unpredictable behavior ungoverned.
The discussion ends with competition and national-security stakes, arguing that safe products can strengthen U.S. competitiveness while circular financing and extreme risks demand oversight.
What was said on this episode
45 statements · 25 positive · 17 negative · 1 mixed · 2 neutral
SpaceX’s growing AI business improved its investment outlook.
“the AI business was a huge portion of that. And so the fact that it grew a lot, thanks in part to this merger with XAI, I think was a positive thing for investors.”
Listen at 2:31
Musk’s proposed Tesla–SpaceX merger is likely to occur.
“because he wants it, it seems likely that that's going to happen.”
Listen at 2:47
A combined Tesla–SpaceX entity could have roughly $3 trillion in financial capacity.
“A company that goes from a trillion dollars to whatever the combined entity would be. A $3 trillion company just has that much more financial might to throw around in this.”
Listen at 3:23
The proposed Tesla–SpaceX combination may be a defensive move.
“So from that point of view, it's in some ways maybe a defensive move.”
Listen at 3:44
SpaceX’s capital expenditures rose to nearly $20 billion from $6.9 billion.
“all of these companies are capex exploded to nearly 20 billion up from 6.9 billion in the same period a year earlier”
Listen at 3:53
Markets lack a firm basis for pricing AI-related financing instruments.
“I don't know if the market really has a firm sense of how to price these things.”
Listen at 5:51
The AI financing market may be smaller than expected soon.
“maybe the market for these things is not going to be quite as big as we thought in the near future.”
Listen at 6:20
Some AI companies may be overleveraged and borrowing excessively.
“Or maybe these companies are over levered. They borrow too much.”
Listen at 6:23
AI credit-market volatility partly reflects the market’s large, nascent structure.
“there's also. just volatility that comes from a market that is so, so large, but also so nascent.”
Listen at 6:27
Comprehensive AI regulation is inevitable but not imminent.
“It's inevitable, but it's not imminent.”
Listen at 8:43
The Supreme Court has made agency AI rulemaking more difficult.
“The Supreme Court has made it more difficult for regulatory agencies to impose rules.”
Listen at 8:53
Congress is currently unable to impose meaningful AI rules.
“Congress is effectively... dysfunctional and incapable of imposing any kind of meaningful rules of the road.”
Listen at 9:20
The United States still lacks comprehensive national privacy legislation.
“We still do not have comprehensive national privacy legislation.”
Listen at 9:34
AI’s transformative nature makes eventual regulation necessary.
“This technology is too transformative for it not to have some sort of rules”
Listen at 10:13
AI requires safeguards because it may transform society more than the Internet did.
“AI is so even more potentially transformational than the Internet and that we need something in place to protect the public.”
Listen at 12:24
Citizens United substantially increased money’s influence in politics.
“Citizens United basically opened the floodgates to money in politics.”
Listen at 12:52
Addressing AI effectively requires addressing political dysfunction.
“if we really want to tackle the AI issue, I'm afraid that at least to some degree, we're going to have to tackle the political dysfunction as well.”
Listen at 13:54
State governments provide a pathway for advancing AI regulation.
“the states, the laboratories of democracy provide a pathway here.”
Listen at 14:28
Data-center opposition reflects broader public distrust of technology companies.
“the data centers in large part are a proxy for the broader concern and lack of trust that the public has with respect to tech companies.”
Listen at 14:54
Data-center tenants should make concrete commitments to local communities.
“they should be accompanied by a commitment to those local markets by the tenants of those data centers”
Listen at 16:32
Data centers may impose local burdens while exporting their benefits elsewhere.
“the burden will be shouldered by the local community, but the benefit will go somewhere else.”
Listen at 17:15
AI regulation should begin with duties of care and loyalty.
“I would start by establishing duties of care and duties of loyalty.”
Listen at 17:34
AI companies should be required to build safe and secure products.
“we want companies to have to build products that are safe and secure.”
Listen at 17:41
AI agents should owe loyalty duties to the people they serve.
“establishing that same kind of duty of loyalty for... AI agents will be necessary.”
Listen at 18:22
AI safety violations need consequences strong enough to motivate shareholder oversight.
“the consequences of violating those duties of care or those duties of loyalty need to be significant enough that shareholders demand that companies comply.”
Listen at 18:43
Companies releasing AI products have an obligation to ensure product safety and security.
“if you're building something and putting out in the market then you have an obligation to make sure that that product is safe and secure”
Listen at 20:04
Strong consequences will induce companies to innovate around AI safety problems.
“If the consequences are significant enough, companies will innovate their way around the problem.”
Listen at 21:14
AI safety and compliance problems are solvable engineering problems.
“These are engineering problems, and they are solvable.”
Listen at 21:28
Internet companies would have been more valuable and useful under stronger regulation.
“I argue that they would be more valuable and they would be more successful and they would be more useful.”
Listen at 21:51
Building safer AI products would increase usefulness, innovation, and profitability.
“If we build them to be better and safer and more responsible, not only will they be more useful, but they will be more innovative and they will be more profitable.”
Listen at 22:19
Government needs stronger technical capabilities and tools for AI oversight.
“we are going to have to upgrade the technical capability and tools inside our government for a modern era.”
Listen at 24:09
AI liability exposure need not materially deter investors from owning AI companies.
“No, not at all. Companies live with liability exposure”
Listen at 24:55
Delaying AI regulation will make it substantially harder to implement later.
“if we don't start now, it's going to be a lot harder to do later.”
Listen at 25:18
OpenAI and Anthropic believe their products can be harmful.
“I believe, they believe, that their products can be quite harmful.”
Listen at 26:17
Shareholder obligations should require companies to produce safe and secure products.
“fulfilling those shareholder obligations requires... safe and secure products”
Listen at 26:57
Safe AI regulation will still permit major success, profits, and investor returns.
“They're still going to be wildly successful. They're still going to make money hand over fist. There's still going to be plenty of opportunity for great returns.”
Listen at 27:10
Companies should compete by developing safe and secure AI products.
“we want companies competing to to to develop safe and secure products”
Listen at 27:53
Circular financing among AI companies raises competition and economic-resilience concerns.
“we should be concerned from a competition and from an economic resiliency perspective when we see all of this circular financing”
Listen at 29:26
AI markets should preserve free and fair competition.
“we want to make sure that we have free and fair competition”
Listen at 29:44
U.S. competitiveness with China is best supported by safe AI products.
“the best way to compete against China is to keep our people safe and encourage our companies to build safe and secure products.”
Listen at 30:18
The U.S. government should rethink defense infrastructure for AI-related security risks.
“we need to rethink our defense infrastructure so that we are suited to address that.”
Listen at 31:01
Advanced AI products have substantial capacity to cause harm.
“these products can do very harmful things. Right. And they are very potent. And they have the capability to do a lot of harm.”
Listen at 32:11
AI systems will not imminently rise up and kill humans.
“They're not going to rise up and kill us tomorrow.”
Listen at 32:21
Focusing exclusively on science-fiction AI risks would create regulatory paralysis.
“If we make everything about this sort of science fiction movie-like problem, it will just create paralysis.”
Listen at 32:43
AI governance should prioritize basic safety, legality, privacy, and creators’ rights.
“We need to go back to first principles.”
Listen at 32:55
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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