Don’t Let the US Sit Out AI’s Version of the Olympics: Werfel

Imagine if the US had little say in the Olympics—no role in setting the rules, picking the judges, or choosing where the games would be held. Our athletes would compete under standards designed by others and would be the last to learn of new mandates or expectations. And if those changes put our athletes at a disadvantage—or even compromised their safety—we would have limited influence.

That’s essentially what I saw happen when the US stepped back from international tax negotiations. Now we face the same risk with artificial intelligence.

On Aug. 26, the UN announced a new scientific panel on artificial intelligence and launched a global dialogue on AI governance. Together, these initiatives are the equivalent of drafting the Olympic charter for this new era: establishing the framework, the rules, and the standards that will govern AI’s future across the planet.

International cooperation isn’t optional—it’s a competitive necessity. When we fail to show up, the world doesn’t pause. It simply moves forward without us.

During my years as IRS commissioner, I worked closely with the Organization for Economic Cooperation and Development on Pillar One and Pillar Two of a new global tax framework. These weren’t arcane exercises in tax law—they were about whether nations could finally modernize the system so companies weren’t shifting profits into tax havens while everyday taxpayers carried more of the load. They were about whether global businesses could face a consistent set of rules instead of a patchwork of costly, duplicative compliance regimes.

But we hesitated. Because of gridlock at home—Congress and the executive branch unable to find common ground on tax policy that would have allowed reasonable international concessions—we couldn’t meaningfully engage. The consequences were real, weakening both our economy and our credibility:

• Other nations began setting unilateral taxes on US technology firms, creating friction for our companies.
• The US lost credibility in shaping the very rules that now govern international profit allocation.
• We forfeited the chance to lock in a more balanced system that would have strengthened our fiscal bottom line while lowering compliance headaches for US businesses.

It was like if the US weren’t in the Olympic organizing committee. The games would go on, but the US wouldn’t be in the room when it mattered most.

If the US once again sits back on AI, the consequences could be even more stark:

• Other nations will set technical standards that US companies must follow regardless of whether they make sense for our markets.
• Authoritarian governments could drive norms that tilt AI toward surveillance and control rather than transparency and fairness.
• Our innovators will be forced to adapt to rules written elsewhere, undermining US competitiveness in one of the defining technologies of this century.

We’ve seen what happens when we do engage. When Congress passed the Foreign Account Tax Compliance Act in 2010, I had the privilege of briefly leading the IRS through the first wave of international agreements to implement it—including the breakthrough treaty that ended the era of the “Swiss bank account” as a safe haven for tax evasion.

Dozens of countries signed on to share financial account data, helping us combat tax evasion while creating a more transparent global system. And FATCA led to implementation of the Common Reporting Standard enabling participating countries to receive offshore account information regarding their residents.

That experience showed the world that when the US has its act together, we can build durable frameworks that protect our interests and strengthen the international order. The same opportunity exists now with AI—if we choose to seize it.

The opening ceremonies for global AI governance have begun. The world’s nations are marching in. The only question is whether the US will join them on the field or sit in the stands while others decide how the global games are played.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Danny Werfel was commissioner of the IRS from March 2023 to January 2025 and is executive in residence at the Johns Hopkins School of Government and Policy.

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