• Treasury Secretary Janet Yellen delivered remarks at the open session of the FSOC meeting, saying, “We have also been addressing emerging risks from significant technological changes. Digital assets and artificial intelligence bring potential benefits such as efficiencies, but also financial risks, cyber risks, and risks from third-party service providers. The Council continues to call for legislation to create a comprehensive federal prudential framework for stablecoin issuers and for legislation on crypto assets that addresses the risks we have identified. And we recommend building further interagency expertise to analyze and monitor potential systemic risks associated with the use of AI in the financial services sector while facilitating innovation. Treasury’s report on AI-specific cybersecurity risks is one example of recent progress, equipping financial institutions with information on best practices. Efforts like Treasury’s Project Fortress, which brings more than 1,000 financial institutions together to combat cybersecurity risks, are also key.” (Prepared remarks)

Commodity Futures Trading Commission (CFTC)

• CFTC Chair Rostin Behnam said of the AI advisory, “Given the dynamic nature of artificial intelligence and the growing integration of AI in derivatives markets, the advisory is a smart first step to engage with the marketplace and ensure ongoing compliance with the Commodity Exchange Act and the CFTC’s regulations. As firms may thread AI into the fabric of nearly every aspect of their operations, staff intends to monitor for any risks from AI that may merit policy or regulatory consideration.” (PoliticoPro)

Internal Revenue Service (IRS)

• In an interview with TaxNotes, IRS Commissioner Danny Werfel said, “I worry about how AI could be used by bad actors in the world to compromise the integrity of our tax system,” including using AI for identity theft or tax debt scams. Werfel added, “I think there’s a sense that if we get too forward-leaning on AI that we’ll lose some of the important diligence around the Taxpayer Bill of Rights” and “AI can now take all that information and give you a smart, cogent answer to the question pulling on all of those references and doing some of the research for you.” (TaxNotes)

CONGRESS

NDAA

• A spokesperson for Senate Majority Leader Chuck Schumer (D-NY) said about the end of negotiations on including a bipartisan AI package in the NDAA, that Senate Republican Leadership “pulled the rug out from underneath everyone and said there would be no deal this year.” (PoliticoPro) The spokesperson added that Schumer “remains committed to finding a bipartisan path forward on AI legislation and hopes Senate Republicans get serious about maintaining the U.S.’s leadership on AI innovation.” (PoliticoPro)

• In a statement to Politico, Senate Commerce Chair Maria Cantwell (D-WA) said “Senator Cruz does not support moving any AI legislation this year,” (PoliticoPro)

• Senator Todd Young (R-IN) said of the issue, “I’ve not encountered any major stakeholder who has anxiety or concerns. In fact, I’ve not encountered one who didn’t regard it as a good idea to pass the act.” (PoliticoPro) He also said, “I hope it’s not partisan politics after the election, which would be peculiar but not unprecedented.” (PoliticoPro)

• Sen. Mike Rounds (R-SD) said, “I really believe that sometimes it takes a little bit longer to cook this stuff. But I think it will happen. It will not be years, it will be months.” (PoliticoPro)

White House AI and Crypto Czar

• Rep. Stephen Lynch (D-MA) said, “It will be a big change from where we are right now. I just thought we might get someone who was a little bit more objective. There’s enough caution in that space that’s deserved that might be overridden by the president’s own interests as well. It seems to be all pushing from the same direction, and I’m not comfortable with that.” (PoliticoPro)(PoliticoPro)

• Sen. Todd Young (R-IN) tweeted, “Tech power — AI, crypto, and more — is fundamentally transforming our economy, security, and the very nature of global power. With the appointment of a White House AI and Crypto Czar, President Trump and his administration will be positioned to restore ‘Peace through Strength’ and seize the opportunities this dynamic period presents.”

• Rep. Dusty Johnson (R-SD) said, “He’s obviously brilliant. I’m pretty excited, because I do think there’s a lot we have to get done in the AI and digital asset space — and, listen, David Sacks is a guy who knows how to charge forward.” (PoliticoPro)

• Rep. French Hill (R-AR) tweeted, “With AI and crypto rapidly advancing in our society, I couldn’t think of a better time than now to appoint DavidSacks to lead the charge with realDonaldTrump. As a proven leader on #DigitalAssets in Congress, I look forward to working with David and President Trump on driving our mutual priorities of bolstering innovation and ensuring America is the leader of these groundbreaking technologies. A new era in American innovation starts now.”

• House Financial Services Chair Patrick McHenry tweeted, he mere fact that the U.S. now has a crypto and AI “czar” reflects the impact of FinancialCmte. The era of regulation by enforcement is over. With folks like David Sacks and Paul Atkins, the future of the digital asset ecosystem in the U.S. is brighter than ever.”

• Rep. Ritchie Torres (D-NY) said, “I welcome his pro-tech tendencies… when it comes to crypto, the positions that matter most are the SEC and CFTC” and “it is unclear to me what impact a crypto czar would have on crypto policy.” (PoliticoPro)

• House Committee on Agriculture tweeted, Congratulations, DavidSacks! Chairman CongressmanGT is excited to work together to build on the House’s strong digital asset legislation.”

• Rep. Tom Emmer (R-MN) tweeted, President realDonaldTrump’s choice of DavidSacks as White House AI & Crypto Czar is a huge win for American investors and innovation. Congratulations, David, we look forward to working with you!”

• Rep. Warren Davidson (R-OH) tweeted, “An exceptional choice by  realDonaldTrump to lead on crypto, AI, and financial innovation. Congratulations DavidSacks! I look forward to working with you.”

Miscellaneous

• Regarding potential opposition to a compromise China outbound investment bill, Speaker Mike Johnson said, “Look, we work on consensus around here. We don’t always please 100 percent of the membership, but we’re working on consensus.” (PoliticoPro)

• Sens. Bill Cassidy (R-LA), Ted Cruz (R-TX), and Amy Klobuchar (D-MN) issued a press release on Senate passage of their Tools to Address Known Exploitation by Immobilizing Technological Deepfakes on Websites and Networks (TAKE IT DOWN) Act, which would criminalize the publication of non-consensual intimate imagery (NCII), including AI-generated NCII (commonly referred to as “deepfake revenge pornography”), and require social media and similar websites to have in place procedures to remove such content within 48 hours of notice from a victim. (Press release)

• Retweeting a Bloomberg article, Sen. John Cornyn (R-TX) tweeted, “Software company Palantir and weapons maker Anduril plan to accelerate the use of AI in the US military and are inviting other companies to join the effort.”

• Rep. French Hill (R-AR) tweeted, “FinancialCmte stands ready and willing to work alongside DOGE as we work to cut gov red tape and use AI, blockchain, and other technologies to make gov more effective for hardworking Americans.”

• Financial Services GOP tweeted, “It’s no secret that artificial intelligence is here to stay and promises to profoundly impact our economy. That’s why the Committee launched our bipartisan AI Working Group to explore how this technology will influence the financial services and housing industries.”

• Financial Services GOP also tweeted, “As the private sector leads the way in innovation, AI and fintech are growing in relevance and adoption and regulators must stay up to date. It’s equally important that regulators utilize new technology to improve the efficiency and efficacy of their supervision.”

• Financial Services GOP also tweeted, “Chairman PatrickMcHenry and Ranking  Member Maxine Waters are leading bipartisan efforts highlighting the impact of AI on the financial services and housing industries.”

• Rep. Byron Donalds (R-FL) tweeted, “The future of finance is the digital assets space. The future of technology is AI. If our nation is to remain a dominant global force in the future of finance and technology… 1 – We have to increase baseload power 2 – We have to modernize the grid”

• Rep. Ayanna Pressley (D-MA) tweeted, “AI has the potential to transform our financial system for the better, but it can also worsen existing inequalities. We must get this right. We need to harness the power of AI to create more opportunities while protecting consumers, promoting equity, & expanding financial inclusion for all.”

• Rep. Madeleine Dean (D-PA) tweeted, “Great news — our bipartisan TAKE IT DOWN Act passed the Senate! We must get a hold on AI regulation to better protect victims of deepfakes, often girls and women, by ensuring the removal of these online images. I am eager for it to be brought to a vote in the House.”

• Sen. Eric Schmitt (R-MO) tweeted, “Today I introduced the Protecting AI and Cloud Competition in Defense Act with SenWarren. This would ensure DoD procurement of AI and cloud computing tools enhances competition. Requires DOD to administer a competitive award process, ensures that the government maintains exclusive rights to access and use of all government data, and considers multi-cloud technology where feasible and advantageous. Requires DOD to publish a report every four years on competition, innovation, barriers to entry, and market power concentration in the AI sector, with recommendations for legislative and administrative action.”

• Sen. Marsha Blackburn (R-TN) issued a press release regarding AI-enabled fraud and scams directed to seniors, stating, “Older Americans are the ones who have been hit most frequently with this, as an emerging threat. Now, the fraudsters that are utilizing AI to deceive consumers have gotten crafty when it comes to creating these highly personalized and convincing attacks. What is surprising to a lot of people is the fact that they are doing this at scale… These attacks have become very realistic. The spear phishing emails that really use a lot of this, make it appear that it’s coming from a trusted source. And adding to this, the chat box, which make it appear that you are having an actual real-time conversation with someone, is very disarming… The use of these tools by the scammers are becoming more prevalent, they’re becoming more precise, more widespread, and harder to attack.” (Press release)

• Retweeting the FTC, Rep. Jan Schakowsky (D-IL) tweeted, “AI developers should not misrepresent what their tech can do. If AI algorithms are not properly designed, they will only deepen existing inequality and further harm consumers. We must continue to take action to implement common sense guardrails on this growing industry.”

• Sen. Ted Cruz (R-TX) tweeted a Reuters article, “Senator Ted Cruz demands probe into European influence on AI policy”

• Rep. Brandon Williams (R-NY) tweeted, “China has declared economic war on America, cutting off access to critical minerals (Ga, Ge, & Sb) essential for tech and defense industries. Dependence on China and Russia for critical minerals leaves us vulnerable to our global competitors. China is banning exports to the United States of gallium, germanium, antimony and other key high-tech materials with potential military applications. America must dominate Energy + Critical Minerals + Artificial Intelligence to remain the global leader for another century. At the mercy of others, we hand over the 21st century to China and Russia. This is unacceptable. Let’s dive in on all three. 1) America must have abundant and secure energy sources. Domestic natural gas is our “SHIELD” to protect national security and prosperity. Natural gas is critical to keep the lights on, our homes warm, and American industry (and jobs) humming. Abundant natural gas production strengthens our economy and secures our relationships with our friends. Peaceful nuclear power, similarly, is our “SWORD.” America must lead the world in nuclear energy technology, innovation, and fuel production. Our allies, and all peaceful nations, prefer the United States as their source for nuclear technology and fuel. Relationships sharing nuclear energy last for a century and determine whether the world relies upon America and the West, or China and Russia, for clean energy. 2) We must secure our supply of Critical Minerals, including gallium, germanium, antimony, indium, uranium, lithium, cobalt, and others. Each is essential for a modern economy and crucial for defense-tech and AI leadership. 3) Artificial Intelligence leadership today is the equivalent of the Manhattan Project in WWII. Winning is not optional. AI depends on cutting-edge chips -> which require critical minerals. Additionally, AI requires -> abundant energy that is reliable, affordable, and resilient. Our future at stake, America must dominate energy production, strengthen critical mineral supply chains, and lead the global race for AI. We must align our economy, national defense strategy, and diplomacy to this end. The prosperity of American citizens for the next century depends on how well we address these issues right now. Whoever wins the next ten years will dominate the next hundred. Leadership is required. Failure is not an option.”

• Science Committee Democrats tweeted, “Earlier this month, RepZoeLofgren welcomed to San Francisco the members of the global AI Safety Institute at the Network’s inaugural convening. The Global AISI will allow us to align our priorities and help to collaborate and coordinate our way toward safe and trustworthy AI. In her remarks, Ms. Lofgren said: “The expertise in this global network of AISIs will be invaluable in solving our most pressing AI governance challenges, including by working together to develop meaningful evaluations & technical solutions to minimize risk from AI technologies.”

• Sen. Amy Klobuchar (D-MN) tweeted, “I was at this year’s HFXforum as part of a bipartisan Senate delegation. We discussed our shared security priorities with world leaders. From the war in Ukraine to the rapid adoption of AI, we must continue to work together to address these challenges head-on.”

• Sen. Chris Coons (D-DE) tweeted, “When used safely and responsibly, AI can change healthcare for the better—in the First State, it’s helping radiologists detect cancer earlier which can save lives.”

• Rep. Abigail Spanberger (D-VA) tweeted, “Millions of Americans have fallen for scams while Black Friday shopping — and this year, criminals are exploiting innovations in AI technology to develop even more sophisticated scams. Make sure you’re getting a deal, not dealing with a deepfake.”

• Rep. David Kustoff (R-TN) tweeted, “Congratulations to this year’s Congressional App Challenge winner, Alex Barthel from St. George’s Independent School in Shelby County! Alex created Unbias, an app that uses AI to detect biases in news sources. It is great to see such impressive work from the next generation of West Tennesseans. Alex, you have a bright future!”

• Rep. Nick LaLota (R-NY) tweeted, “Productive meeting with SUNY Chancellor John King and his team yesterday! Discussed Stony Brook and how federal investments in AI, quantum research, and workforce development can drive innovation and opportunity across Long Island.”

• Rep. Julia Letlow (R-LA) tweeted, “Thrilled to welcome Meta to LA05! This groundbreaking $10 billion investment and new AI data center will shape the future of Richland Parish and our entire state for generations to come.”

• Rep. Al Green (D-TX) tweeted, “Congressman Al Green Questions Witnesses on AI’s Threat to Jobs and Risk of Racial Bias. Watch the full clip of Rep. Green’s remarks during the FSCDems hearing.”

• Rep. Beth Van Duyne (R-TX) tweeted, I enjoyed meeting with North Texans from usbank to discuss my legislative agenda for the new year, AI and healthcare innovations in North Texas, as well as my work to extend and expand the 2017 Trump Tax Cuts.”

• Rep. Deborah Ross (D-NC) tweeted, “Congratulations to Kenna Zhang, our 2024 Congressional App Challenge winner, for creating an app that uses AI to assist with early diagnosis of Parkinson’s Disease. I’m so proud to represent such innovative students in our district.”