Navigating the Regulation of Artificial Intelligence in the U.S.

For the first time, Washington is approaching the challenge of regulating artificial intelligence (AI), and the ongoing debate centers not on the technology itself but on who holds the regulatory power. As various states take action without a unified federal standard focused on consumer safety, an array of bills have emerged to safeguard residents from potential AI-related harms. Notable among these are California’s AI Safety Bill SB-53 and Texas’s Responsible AI Governance Act, both aimed at curbing the intentional misuse of AI systems.

The Battle Over Regulation

Innovative tech giants and startups from Silicon Valley advocate that these state laws lead to a fragmented regulatory landscape, which they claim stifles innovation. Josh Vlasto, co-founder of the pro-AI PAC Leading the Future, insists that the existing patchwork threatens to hinder progress, particularly in the context of competition with China.

“There’s a real risk of slowing down our race against countries like China,” Vlasto asserted in an interview with TechCrunch. The tech industry, supported by allies within the White House, is now pushing for a national AI standard—or a complete absence of regulation at the state level. This “all-or-nothing” stance has sparked new initiatives aimed at preventing states from enacting their own AI regulations.

Legislative Developments

House lawmakers are reportedly trying to weave language into the National Defense Authorization Act (NDAA) that would prevent states from instituting AI regulations. Concurrently, a leaked draft of a White House executive order outlines plans to preempt state regulatory efforts. However, this sweeping preemption is not popular in Congress, which recently rejected a similar moratorium. Lawmakers believe that without a federal standard, barring state regulations would leave consumers vulnerable and provide tech companies an opportunity to operate unchecked.

In an effort to establish a national standard, Rep. Ted Lieu (D-CA) and the bipartisan House AI Task Force are crafting a federal AI legislative package that encompasses various consumer protections. These range from fraud and healthcare issues to promoting transparency and addressing catastrophic risks. However, such comprehensive legislation is anticipated to take months or even years to pass, further complicating the current debate over limiting state authority.

The Planned NDAA Provisions and Executive Orders

Efforts to impede state regulations have intensified recently. The House has been considering including provisions in the NDAA that would bar states from regulating AI, as noted by Majority Leader Steve Scalise. Negotiations within Congress are reportedly focusing on refining the scope to allow states some measure of authority in areas like child safety and transparency.

In parallel, the leaked White House executive order proposes creating an “AI Litigation Task Force” that would actively challenge state laws in court, assess laws deemed overly burdensome, and guide federal agencies towards implementing national standards that eclipse state rules. Notably, this task force would be co-led by David Sacks, a prominent figure in AI policy within the Trump administration, which raises concerns about concentrating regulatory power.

Sacks has publicly advocated for minimal federal oversight, emphasizing the need for industry self-regulation to foster growth. This belief resonates with much of the current landscape of AI, where several pro-AI super PACs have emerged to financially support candidates who oppose stringent AI regulations.

The Arguments on AI Regulation

Proponents of a national AI standard argue against the fragmented regulatory landscape that state regulations create. Vlasto has been vocal in asserting that inconsistencies in state laws can inhibit technological advancement. Recently, Leading the Future launched a substantial campaign to push for a cohesive national AI policy.

In contrast, opponents of federal preemption stress the necessity of state-level agility in responding to emerging AI risks. Alex Bores, a New York Assembly member and proponent of the RAISE Act—which mandates safety plans for large AI labs—believes that reasonable regulations can coexist with technological advancements. He argues that states often move more rapidly to address potential problems than federal legislation allows.

The Speed of State Legislation

Indeed, states have been quick to adopt AI laws—over 100 pieces of legislation have been passed across 38 states in the past year alone, primarily targeting issues like deepfakes, government AI use, and transparency in AI operations. However, studies indicate that a significant portion of these laws impose no real requirements on developers.

The stark contrast in legislative action at the federal level further supports the argument for state regulations. Since 2015, more than 67 bills related to AI have been introduced in Congress, yet only one has ultimately become law.

More than 200 lawmakers signed an open letter opposing the preemption attempt in the NDAA, asserting states’ roles as “laboratories of democracies.” They argue that states should retain the flexibility to confront new digital challenges.

Accountability and the Need for a Federal Standard

Critics of the patchwork argument, including cybersecurity experts, highlight that AI companies already comply with stricter regulatory frameworks, such as those in the European Union. This leads some to question whether the push for a national standard is motivated by a genuine concern for innovation or a desire to evade accountability under varying state laws.

Potential Federal Framework for AI

Rep. Lieu is in the process of drafting a megabill that covers more than 200 pages and focuses on various consumer protection aspects, including fraud penalties, protections against deepfakes, and requirements for whistleblower protections. It will also demand that AI labs test their models and disclose results—an area where voluntary compliance is currently the standard.

His proposed legislation aims to avoid the pitfalls of more stringent federal evaluations of AI models, positioning it more likely to gain bipartisan support in a Republican-led Congress. Lieu notes that his ultimate goal is to enact a law that navigates the complex political landscape effectively.

Conclusion

As Washington navigates the complicated terrain of AI regulation, the focus remains on who gets to shape the future of these technologies. While the battle between federal and state authority is heating up, the overarching goal of ensuring consumer protection remains paramount. As legislation moves forward, the outcome will significantly impact both the tech industry and everyday users, marking a crucial juncture in the evolution of artificial intelligence governance in the United States.

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Emmanuel Kesse

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