Lynch Warns AI Governance Heading Towards 'Regulatory Dumpster Fire'

US Treasury Secretary Scott Bessent faced pressure from Rep. Stephen F. Lynch (D-MA) to investigate the risks posed by artificial intelligence during a House Financial Services Committee hearing on July 14, 2026.

Lynch warned that the administration's approach to AI governance is heading towards a 'regulatory dumpster fire' similar to the crypto industry's well-documented regulatory gaps. He cited $200 million to $250 million in industry lobbying expenditures and argued that letting companies write their own rules produced predictably bad outcomes for consumers.

Bessent countered that the US needs to push its global compute power from 55% to 60% to 80% by 2028, positioning Treasury as a central player in this strategy. He advocated for voluntary industry guidelines rather than prescriptive regulation and acknowledged the need to address cybersecurity measures related to AI.