Public Policy & Governance

Technology Secretary Liz Kendall confirmed the UK government no longer has a 'preferred option' on copyright reform for AI training, effectively abandoning a previous proposal that would have allowed tech companies to use copyrighted material unless rights holders opted out. The reversal follows sustained opposition from actors, musicians, and writers who argued the opt-out model would undermine their ability to control use of their work, according to The Guardian. The government had framed the original proposal as essential to maintaining the UK's competitiveness in AI development, but faced a coordinated campaign from creative industry unions and trade bodies who threatened legal challenges under existing copyright law.

The policy reversal represents a significant constraint on the Labour government's stated ambition to position Britain as an AI superpower. Unlike the EU's approach in the AI Act — which carved out limited text and data mining exceptions while preserving copyright enforcement — the UK was attempting a more permissive framework that would have shifted the burden to rights holders. The government is now back at square one on what has become one of the most contentious regulatory questions in AI governance: how to balance the compute-intensive data requirements of model training against intellectual property protections that predate generative AI.

The Institute for AI Policy and Strategy has published recommendations for targeted government intervention against Chinese AI companies conducting systematic campaigns to extract capabilities from American frontier models through distillation attacks, citing evidence published by Anthropic, OpenAI, and Google in February 2026, according to IAPS. The memo argues for using Bureau of Industry and Security Entity List designations to restrict adversary AI companies' access to US technology and cloud computing resources, moving beyond voluntary industry countermeasures. Distillation attacks involve querying frontier models millions of times to reverse-engineer their capabilities into smaller, independently deployable models — effectively circumventing export controls on AI chips by stealing the intellectual property encoded in model weights.

This represents an escalation in thinking about AI security controls. Previous measures have focused on chip export restrictions and cloud compute monitoring requirements under the October 2025 Commerce Department interim final rule on advanced computing. Entity List designations would allow BIS to block named Chinese companies from accessing any US-origin technology or services without a license, including API access to closed models and partnerships with US cloud providers. The proposal reflects growing frustration in the national security community that voluntary industry safeguards are insufficient when adversaries are conducting state-backed industrial espionage at scale.

FBI Director Kash Patel has publicly confirmed for the first time that the bureau is actively purchasing commercial data that can be used to track individuals, according to Politico. The acknowledgment comes amid ongoing debate over whether law enforcement agencies should be required to obtain warrants before purchasing data that would require a warrant if obtained directly from tech companies or telecom providers. The FBI had previously maintained internal policies restricting such purchases following congressional scrutiny in 2024, but Patel's statement indicates those limitations have been lifted or were never fully implemented.

The legal status of government data purchases remains unresolved. In United States v. Carpenter (2018), the Supreme Court held that accessing historical cell-site location information requires a warrant, but subsequent lower court rulings have split on whether purchasing equivalent data from commercial brokers constitutes a Fourth Amendment search. The FBI's resumed purchasing occurs as the Federal Trade Commission has pursued enforcement actions against data brokers for selling location information to government buyers, and as several states have passed laws restricting commercial data sales. The disconnect between FTC enforcement targeting the sellers and FBI practices as a buyer highlights the absence of a coherent federal framework governing this market.