Memo 01.14.2026 3 minutes

AI Can Help Solve the Fraud Epidemic

In this photo illustration, the United States of America (

Tech for the American people.

For years, AI has been surrounded by extreme predictions of ushering in either catastrophe or paradise, with breakthroughs in machine intelligence repeatedly promised as imminent for well over a decade. Elon Musk has recently stated that artificial general intelligence, where AI matches or exceeds human-level capabilities across tasks, could arrive as early as later this year. A reasonable person might assume that’s optimistic, but it nevertheless merits a serious look at what that means for Americans and our politics.

Many on the Right are correctly concerned about what this transition could look like for our nation. As government spending at all levels exceeds 40% of GDP, the reality is that it will be a political issue with implications for both this year’s midterms and the 2028 presidential election. Figures like Steve Bannon and Ron DeSantis are staking out pro-regulatory positions on AI, emphasizing risk mitigation and regulations that could alter the development of this technology. The regulatory appetite will likely only increase as we see the impact on the economy grow—a fact that must be reckoned with.  

We share a positive vision for the future AI may bring, where it dismantles bloated bureaucracies, unleashes economic growth, and rewards high-agency individuals to build the future we want to live in.

Selling that vision to Americans who have seen tech weaponized against them for more than a decade will take more than talk. We need to show them what AI can do to improve their lives and the frankly lackluster quality of their governance. Americans deserve to see this technology working for them.

We believe there is an opportunity to deploy AI to tackle one of our nation’s most pressing problems: rampant government fraud.

Conservative estimates suggest fraud, waste, and abuse in Medicaid alone cost taxpayers more than $100 billion annually—roughly 10-20% of the program’s total spending. This isn’t an isolated incident. Similar issues likely afflict other entitlement programs like SNAP and unemployment insurance, where outdated systems fail to detect improper payments amid complex eligibility rules and massive data volumes.

Here’s the opportunity: state leaders should harness AI to combat this fraud head-on, providing a use case that directly benefits everyday Americans. AI tools powered by machine learning can analyze vast datasets in real time to flag anomalies, such as duplicate claims, ineligible providers, or patterned abuse, that human auditors have been unable or unwilling to identify. For instance, predictive algorithms could cross-reference claims with public records, identifying ghost patients or overbilling schemes before funds are disbursed. States like Texas, Indiana, and West Virginia could pilot these systems, potentially saving citizens billions while ensuring aid reaches those truly in need.

In the private sector, AI has revolutionized fraud detection in banking and insurance. Why not apply it to government? Red states are ideally positioned to lead. Through our work at the State Leadership Initiative, we’ve partnered with governors in states like Indiana, West Virginia, and Wyoming to streamline bureaucracies and foster innovation. Extending this to AI-driven fraud detection aligns perfectly with our mission: enhancing constitutional freedoms, driving cultural shifts toward self-reliance, and creating economic advantages.

The American people are calling for reforms in the wake of the Minnesota fraud scandals. The Trump Administration has met the moment with boots on the ground, bringing charges against nearly 100 individuals and announcing a new division within the DOJ to lead these types of cases. Red states are poised to proactively identify and tackle these issues, which would be a political win. Allowing them to utilize new technology would take these efforts to a new level.

In 2026, let’s seize this moment. Using this technology to revitalize the American model of self-government and improve our way of life will go a long way toward giving Americans tangible benefits they can be inspired by.

The American Mind presents a range of perspectives. Views are writers’ own and do not necessarily represent those of The Claremont Institute.

The American Mind is a publication of the Claremont Institute, a non-profit 501(c)(3) organization, dedicated to restoring the principles of the American Founding to their rightful, preeminent authority in our national life. Interested in supporting our work? Gifts to the Claremont Institute are tax-deductible.

Suggested reading

to the newsletter