This happened as generative and agentic systems became essential in key sectors worldwide. This feature highlights the major AI ethics and policy developments of 2025, and concludes with a forward-looking perspective on the ethical and policy challenges likely to shape 2026.

HHS Is Using AI Tools From Palantir to Target'DEI' and'Gender Ideology' in Grants Since March of 2025, the Trump Administration has used tools from Palantir and the startup Credal AI to weed out "DEI" and "gender ideology from child welfare programs. A view of the Palantir building is seen during the World Economic Forum Annual Meeting 2026 in Davos, Switzerland. Since last March, the Department of Health and Human Services has been using AI tools from Palantir to screen and audit grants, grant applications, and job descriptions for noncompliance with President Donald Trump's executive orders targeting "gender ideology" and anything related to diversity, equity, inclusion (DEI), according to a recently published inventory of all use cases HHS had for AI in 2025. Neither Palantir nor HHS has publicly announced that the company's software was being used for these purposes. During the first year of Trump's second term, Palantir earned more than $35 million in payments and obligations ...

In 2026, states will go head to head with the White House's sweeping executive order. In the final weeks of 2025, the battle over regulating artificial intelligence in the US reached a boiling point. On December 11, after Congress failed twice to pass a law banning state AI laws, President Donald Trump signed a sweeping executive order seeking to handcuff states from regulating the booming industry. Instead, he vowed to work with Congress to establish a "minimally burdensome" national AI policy, one that would position the US to win the global AI race. The move marked a qualified victory for tech titans, who have been marshaling multimillion-dollar war chests to oppose AI regulations, arguing that a patchwork of state laws would stifle innovation. In 2026, the battleground will shift to the courts.

Our AI writers make their big bets for the coming year--here are five hot trends to watch. In an industry in constant flux, sticking your neck out to predict what's coming next may seem reckless. But for the last few years we've done just that--and we're doing it again. How did we do last time? Here are our big bets for the next 12 months. The last year shaped up as a big one for Chinese open-source models.

US support for nuclear energy is soaring. Meanwhile, coal plants are on their way out and electricity-sucking data centers are meeting huge pushback. Welcome to the next front in the energy battle. Take yourself back to 2017. Get Out and The Shape of Water were playing in theaters, Zohran Mamdani was still known as rapper Young Cardamom, and the Trump administration, freshly in power, was eager to prop up its favored energy sources. That year, the administration introduced a series of subsidies for struggling coal-fired power plants and nuclear power plants, which were facing increasing price pressures from gas and cheap renewables.

DOGE dominated the news this year as Elon Musk's operatives shook up several US government agencies. Since the beginning of the Trump administration, the so-called Department of Government Efficiency (DOGE), the brainchild of billionaire Elon Musk, has gone through several iterations, leading periodically to claims-- most recently from the director of the Office of Personnel Management--that the group doesn't exist, or has vanished altogether. Many of its original members are in full-time roles at various government agencies, and the new National Design Studio (NDS) is headed by Airbnb cofounder Joe Gebbia, a close ally of Musk's. Even if DOGE doesn't survive another year, or until the US semiquincentennial--its original expiration date, per the executive order establishing it--the organization's larger project will continue. DOGE from its inception was used for two things, both of which have continued apace: the destruction of the administrative state and the wholesale consolidation of data in service of concentrating power in the executive branch.

Hamstrung by lawsuits, the state can't officially keep its goal to ban new gas-powered car sales by 2035. But it's going to keep trying. It's been a weird and confusing few weeks for the auto industry--especially for those who hoped to see more batteries on the road in the coming decade. Just this month: Ford announced a retrenchment in its EV business, canceling some battery-powered vehicle plans and delaying others; the European Commission proposed to backtrack its goal to transition fully to zero-emission cars by 2035; the US government said it would loosen rules that would have required automakers to ratchet up the fuel economy of their fleets. BloombergNEF projects 14 million fewer EVs will be sold in the US by 2030 than it did last year--a 20 percent drop.

Donald Trump, center, signs a an executive order on artificial intelligence in the Oval Office on December 11. He is joined by, from left, AI advisor Sriram Krishnan, Senator Ted Cruz, Commerce Secretary Howard Lutnick, and AI and crypto czar David Sacks. Donald Trump, center, signs a an executive order on artificial intelligence in the Oval Office on December 11. He is joined by, from left, AI advisor Sriram Krishnan, Senator Ted Cruz, Commerce Secretary Howard Lutnick, and AI and crypto czar David Sacks. Last week, President Donald Trump signaled his allegiance to the AI industry yet again by signing an executive order that aims to block states from regulating AI.

California governor Gavin Newsom speaks during an election night press conference in Sacramento, California, on 4 November. California governor Gavin Newsom speaks during an election night press conference in Sacramento, California, on 4 November. California governor says order pushes'grift and corruption' instead of innovation just hours after president's dictum The ink was barely dry on Donald Trump's artificial intelligence executive order when Gavin Newsom came out swinging. Just hours after the order went public Thursday evening, the California governor issued a statement saying the presidential dictum, which seeks to block states from regulating AI of their own accord, advances "grift and corruption" instead of innovation. "President Trump and David Sacks aren't making policy - they're running a con," Newsom said, referencing Trump's AI adviser and crypto "czar" .