U.S. Spy Agencies Seek Expanded Power Over AI Regulation as Trump Admin Internal Battle Pits Intelligence Community Against Commerce Department

The Washington Post reported May 11, 2026 that U.S. national security officials are seeking expanded authority over AI regulation as the Trump administration internally debates how to structure oversight of frontier AI models. The push is driven in significant part by the Mythos AI model from Anthropic, which has demonstrated cyber-vulnerability identification and exploitation capabilities that intelligence agencies argue make AI regulation a national-security matter rather than a civilian-regulatory one. NIST (Commerce Department) is currently running pre-release tests on AI models from Google, Microsoft, and xAI; the intelligence community is arguing this authority should sit with them. Same day, NEC Director Kevin Hassett said publicly the administration will NOT create a new agency for AI oversight — meaning whatever regulatory authority exists will be lodged inside existing institutions, with the intelligence community pushing to capture it.

This is the intelligence-privatization framework operating in real time at a new domain. The Church Committee reforms (1975-1978) pushed surveillance capability into private contractors who faced fewer restrictions than government agencies; this dynamic now extends into AI governance, where private-sector capability development outpaces civilian-regulatory authority and the intelligence community moves to absorb the regulatory function rather than yield it to Commerce. The structural argument: when the technology being regulated has dual-use national-security implications, the agencies that have historically operated with the fewest accountability mechanisms (CIA, NSA, ODNI) capture the regulatory function from the agencies that historically operated with the most (Commerce, FTC, congressional oversight). The Hassett “no new agency” announcement closes the alternative path — there will be no Commerce-anchored civilian AI regulator; oversight will sit inside existing institutions where the intelligence community has the strongest internal claim.