Cozen Currents: Who’s in Control Here?

“AI is the latest battle in the long running war between DC and Silicon Valley for ultimate control over cutting edge technology.” — Howard Schweitzer, CEO, Cozen O’Connor Public Strategies

The Cozen Lens

• Anthropic’s run-in with the Trump administration is just the latest in a long history of clashes between the federal government and tech firms over who should control emerging technologies.
• Expectations are that Senate Minority Leader Chuck Schumer (D-NY) will remain as Senate Democratic Leader through at least 2028, though that has not stopped jockeying by other Senate democrats to assume that role.
• As the Trump administration has taken a lighter touch toward antitrust and competition policy enforcement, state and local regulators have sought to fill a perceived gap in oversight.

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The Battle for Control of Technology

Uncle Sam vs. Silicon Valley. Control over emerging technologies is often a point of contention between the federal government and tech firms.

• Whether it’s encryption or AI, the development of new technologies frequently poses questions about national security, user privacy, and who should steward powerful innovations.
• While technological advances can increase efficiency and bring social and economic benefits, they can also turbo-charge bad actors. Elected officials and law enforcement are primarily interested in keeping the country safe and preventing malign activity. By contrast, Silicon Valley prioritizes maintaining the integrity of its products, while advocacy groups seek to protect civil liberties. These conflicting goals can be difficult to balance and incompatible in certain instances.
• The increasing adoption of digital tools fuels a debate about their ownership and usage. If the government (or any customer) purchases software or AI products, should they be able to use it however they wish, or should the companies manufacturing them be able to require guardrails?

Battles Since the Dawn of the Internet. There has been a long history of push and pull between the federal government and Silicon Valley since the start of the digital era.

• In 1993, the Clinton administration approved the “Clipper chip,” which would have given federal authorities a key to bypass cryptography in telecommunications. In the wake of the discovery of technical problems with the chip and opposition from privacy advocates, it was not widely adopted.
• Beginning in the early 2000s, Yahoo waged an ultimately unsuccessful legal battle over a federal government request to turn over user data to the National Security Agency (NSA). Yahoo challenged the demand to participate in the NSA’s PRISM program in the Foreign Intelligence Surveillance Court. PRISM became public because of Edward Snowden’s leaks in 2013, which brought questions about cryptography, privacy, and espionage to the fore.
• In 2016, Apple clashed with the FBI in court over the decryption of a locked iPhone used by one of the perpetrators of the December 2015 terrorist attack in San Bernardino, CA. The FBI sought to require Apple to create a backdoor allowing federal law enforcement agencies to access a device by bypassing software that disables the phone after 10 failed login attempts. The case teed up a debate over privacy and national security. This specific situation was resolved when the federal government found a third party who was able to unlock the phone, which defused tensions without setting a legal precedent.

The AI Debate. Given this context, the current dispute between Anthropic and the Trump administration is nothing new.

• Anthropic and the Department of Defense (DOD), also known as the Department of War, have clashed over the AI firm’s effort to prevent its AI tools from being used for mass domestic surveillance or fully autonomous weapons. Anthropic sought to mandate guardrails on these potential uses, while the Pentagon refused to accept limits on its use of the company’s products. The DOD ultimately designated Anthropic as a supply chain risk, which essentially blocks it from engaging in business with the US military.
• The dispute is now playing out in court. A federal judge blocked the supply chain risk classification and the Trump administration has filed an appeal. The case could eventually go to the Supreme Court and could answer whether customers or creators have ultimate control over how a given technology is used.

Schumer’s Successors

Shouldering the Blame. As Democratic opposition to the second Trump administration ramps up, so too does the intraparty debate over the future makeup of the party’s leadership, particularly in the Senate.

• The second Trump administration ushered in an expansion of executive authority that in turn, refocused much of the Democratic opposition to the administration’s actions onto the shoulders of the party’s congressional minorities. With DOGE laying off government workers, shuttering USAID, and cutting agency contracts, grassroots Democrats, particularly those in the progressive wing of the party, grew frustrated with congressional Democrats’ perceived failure to fight against the administration’s unilateral actions. Senate Democrats, and in particular Senate Minority Leader Chuck Schumer (D-NY), bore the brunt of that frustration. This dynamic worsened first when Schumer backed a GOP-led government funding bill in March 2025, a move seen as abetting the administration instead of opposing it. These frustrations were exacerbated again last fall when moderate Democrats agreed to end the shutdown without a deal to extend the expiring Affordable Care Act subsidies.
• While Senate Democrats have demonstrated greater unity on matters such as the current partial shutdown of the Department of Homeland Security, the Party’s progressive base hasn’t forgiven Schumer for last year’s perceived missteps. As a result, his future leadership is being questioned, evidence of which can be found on the campaign trail. Illinois Senate Democratic nominee (and the likely next senator from the state) Lieutenant Governor Juliana Stratton (D) has repeatedly promised not to support Schumer’s next leadership bid if elected. So have Maine Senate Democratic primary candidate Graham Platner, whom Schumer endorsed against, and Michigan state senator and Senate Democratic primary candidate Mallory McMorrow (D).
• For Schumer, the frustration isn’t unexpected. Party leaders often shoulder the blame for any perceived missteps regardless of where the fault lies. Many before him, including former House Speaker Nancy Pelosi (D-CA) and former Senate Majority Leader Mitch McConnell (R-KY), easily defeated similarly vocal challenges to their leadership. Schumer remains very much a savvy, seasoned hand who has managed to keep democrats largely unified in the Senate when it comes to votes on significant issues, and no single opponent has yet emerged ready to snatch the mantle from him. However, with the criticism affecting Schumer’s approval ratings at home ahead of a potential 2028 challenge from Rep. Alexandria Ocasio-Cortez (D-NY), the base’s frustrations could shape his own decision making regarding his future.

The Line of Succession. While a serious threat to Schumer’s leadership position may not come this cycle, a number of members are quietly positioning themselves behind the scenes for a future leadership campaign when the opportunity presents itself.

• In March, the Wall Street Journal reported that progressive Senator Chris Murphy (D-CT) told activists that members of the Senate Democratic caucus conducted informal whip counts to see if the votes existed to replace Schumer as leader. While Murphy and other progressives aren’t publicly advocating for Schumer’s removal, the Journal notes that “At a minimum, some Senate Democrats and aides want Schumer to commit to retiring from the Senate when he is up for re-election in 2028.”
• The favorite to replace Schumer is believed to be Senator Brian Schatz (D-HI). Schatz has long had leadership ambitions and quickly seized such an opportunity last year, locking up support (with Schumer’s help) to become the next Senate Democratic whip 15 months before the job itself will become available. Schatz is a younger, progressive senator with close ties to leadership. According to reporting by the Wall Street Journal, “Schatz is seen as Schumer’s preferred pick to replace him once he does relinquish his leadership post,” although he “…won’t make any moves until Schumer decides to step aside.” Moderate Senator Catherine Cortez Masto (D-NV) is also speculated as a possible replacement, although she isn’t actively seeking the job per the Journal.
• While Schatz is well-liked within the conference, his leadership ties don’t make him the top pick of progressives like Murphy. Instead, Axios reports that national progressive organizations have been advocating for Senator Chris Van Hollen (D-MD) as a potential candidate, although he himself isn’t actively campaigning for the role. Murphy could also be under consideration after months of elevating his own profile, although he may have ambitions for higher office instead.

The Rise of State and Local Competition Policy Enforcement

A Change at the Top. Even as competition policy enforcement has become less aggressive than it was under the previous administration, state and local officials are seeking to address this perceived gap, resulting in certain business activities remaining under scrutiny.

• While there was always a high likelihood that the Trump administration would be less aggressive in enforcing competition policy than the Biden administration, populist sentiments among Republicans had led some to believe that the new regulators would be more aggressive than traditional Republicans. However, with the departure of former Assistant Attorney General for Antitrust Gail Slater, the perception has been that the more traditional GOP philosophy is winning out, while the Trump administration favors a more business-friendly approach, especially with regard to mergers and acquisitions.
• In light of this philosophy at the federal level, state and local officials have sought to be more aggressive in filling this perceived gap in industry oversight. This effort has been most prominent on the antitrust front, championed by state attorneys general from both parties. Many of the Republicans joining these lawsuits identify more closely with the populist wing of the party, which has historically put more scrutiny on businesses.

States Flex Their Muscles. The differing approaches between state and federal regulators have led to a couple of high-profile clashes recently. In these cases, state antitrust enforcers pursued litigation against transactions that federal regulators agreed to resolve through negotiated settlements.

• While states often join federal cases, clashes between federal and state antitrust regulators are historically rarer, as occurred during Trump’s first term with the merger between T-Mobile and Sprint. The deal that will likely be most closely followed in the coming months is the resolution to the merger between Nexstar and Tegna, with the states winning a temporary pause on the deal from a judge, despite the deal receiving approval from the Federal Communications Commission.
• This more aggressive approach by states has sometimes enabled them to extract additional concessions from the merging parties. Although their jurisdiction is limited to their borders, the economic importance of some states, such as California and New York, can give them outsized influence. This additional layer of scrutiny is unlikely to lift, especially if state regulators feel they can secure policy and political wins.

The Big Apple. Although localities have not often led in competition policy enforcement, recent indications from New York City are that Mayor Zohran Mamdani (D) is trying to change that.

• One of the reasons that localities have typically not played a significant role in competition policy is their relatively limited jurisdiction. However, Mamdani is seeking to change that narrative and brought on former Federal Trade Commission Chair Lina Khan to co-chair his transition team. Mamdani tasked Khan with identifying options for the mayor to address costs in the city using executive authority.
• While Khan has not taken a permanent position in the mayor’s office, one of her top deputies, Sam Levine, was named as the head of the city’s Department of Consumer and Worker Protection. Already, Levine has made waves, helping craft new policies targeting hotels’ “junk fees.” Khan has also reportedly identified a 1969 consumer protection law intended to prohibit “unconscionable” business tactics, which could be used to target hospitals’ and sports stadiums’ pricing of products that can be found cheaper elsewhere.

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