AI panic is building the ultimate honeypot

While Washington and Silicon Valley trade blows over export controls, cloud blackouts, and sovereign equity stakes, society’s daily digital foundation is being subtly transformed. The battlefield is corporate governance.

Following Treasury Secretary Scott Bessent’s warning that foreign AI models distilled from stolen American intellectual property constitute “counterfeit software,” Washington is preparing a formidable regulatory lever: mandatory board disclosures and software supply chain liability. While that sounds like an anticipated response, if that proposal hardens into a compliance requirement, there will be repercussions.