Trump’s NIST Layoffs Raise Questions About CHIPS Act and AI Policy

The Trump administration is reportedly planning to cut nearly 500 staff members at the National Institute of Standards and Technology (NIST), according to Bloomberg. This includes personnel overseeing the agency’s $11 billion semiconductor research and development program, funded under the CHIPS and Science Act. The layoffs may also affect the U.S. AI Safety Institute (AISI), responsible for evaluating the security of emerging AI models.

Impact on the CHIPS Act and U.S. Semiconductor Strategy

NIST plays a crucial role in implementing the CHIPS Act, a $53 billion initiative designed to boost domestic semiconductor manufacturing and research, aiming to reduce U.S. reliance on foreign chip production. Semiconductor Advisors analyst Robert Maire expressed concern, “If there are no employees left to administer the Chips Act program, it is dead by default, as there is no one left to certify that companies have met their requirements, let alone write the checks.”

The administration’s broader plans for NIST remain unclear. The agency, part of the U.S. Department of Commerce, is under new leadership following Secretary Howard Lutnick’s confirmation. NIST’s former director, Dr. Laurie E. Locascio, stepped down in late 2024, leaving Acting Director Craig Burkhardt in charge.

NIST declined to comment on the reported layoffs or their potential impact on CHIPS Act funding, referring inquiries to the Commerce Department, which has yet to respond.

Layoffs and Uncertainty at the AI Safety Institute

The reported NIST cuts come shortly after Elizabeth Kelly, the inaugural director of the U.S. AI Safety Institute, resigned on February 5, 2025. In a LinkedIn post announcing her departure, Kelly highlighted the institute’s accomplishments in strengthening AI model safety and fostering global partnerships. Her resignation has added uncertainty about AISI’s direction under the current administration.

Contradictions with the Stargate Initiative

Simultaneously, President Trump previously announced the Stargate Project, a private-sector investment of up to $500 billion to fund infrastructure for artificial intelligence aimed at securing American leadership in AI and creating hundreds of thousands of jobs. This initiative involves constructing data centers and developing the necessary infrastructure to support advanced AI systems, with partners including OpenAI, Oracle, and SoftBank. The first data centers are already under construction in Texas.

Masayoshi Son, CEO of SoftBank, described the project as heralding a new American "golden age". However, while the Stargate Project aims to advance AI infrastructure, simultaneously reducing NIST’s semiconductor research staff raises questions about how the administration plans to sustain AI hardware development. While Stargate aims to enhance AI capabilities, reducing support for semiconductor research could impact the foundational technology essential for AI advancements.

Trump’s Position on the CHIPS Act

President Trump has previously voiced strong opposition to the CHIPS Act, calling it “so bad” during an appearance on The Joe Rogan Experience podcast in October 2024. Other Republican leaders have also expressed interest in repealing or altering the legislation, even though it had previously gained bipartisan support.

The layoffs at NIST may affect the agency’s ability to allocate CHIPS Act funds, potentially providing Congress time to revisit the law before all remaining funds are distributed.

Additionally, President Trump has suggested imposing tariffs of 25% or more on imported semiconductors. Analyst Robert Maire noted, “We don’t think that the administration has fully thought through all the ramifications .... Well over 80% of chips are foreign made."

What’s at Stake

The combination of NIST layoffs, CHIPS Act uncertainty, and AI safety oversight reductions raises critical questions about the future of U.S. technology leadership:

• Semiconductor research funding cuts could slow domestic chip production, increasing reliance on foreign manufacturers and impacting AI hardware development.

• Weakening AI oversight may leave private companies to self-regulate at a time when AI is rapidly advancing, raising concerns about security, misinformation, and ethical risks.

• Unclear policy direction could create instability in the U.S. tech sector, affecting investment, innovation, and America’s long-term competitiveness in AI and semiconductor industries.

As Congress and industry leaders assess these policy shifts, the outcomes could shape the global balance of power in AI and advanced computing for years to come.

What This Means

The administration's concurrent promotion of the Stargate AI infrastructure project and potential reduction in support for semiconductor research and AI oversight raises questions about the coherence of U.S. technology policy. While the Stargate Project aims to advance AI development, changes to semiconductor research funding and AI safety oversight could influence the broader ecosystem supporting AI progress.

The long-term impact of these policy shifts remains uncertain. How Congress, industry leaders, and global competitors respond will determine whether America will be able to strengthen or weaken its position in semiconductor manufacturing and AI development.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.