State lawmakers’ efforts to regulate artificial intelligence are running into increased resistance from business groups, governors and Republicans in Washington over economic concerns, leading to some bills being killed and others reworked.
The U.S. House Energy and Commerce Committee raised the stakes last week with a proposed 10-year moratorium on states enforcing AI laws or regulations. Lawmakers from coast to coast quickly denounced the idea, though Colorado Gov. Jared Polis (D) signaled support.
That federal proposal and the roadblocks in statehouses signal a regulatory landscape shift that took place after President Trump adopted a policy of “AI dominance.”
“There is lots of coordinated effort to block the progression of these legislative efforts at the state level,” said Virginia Del. Michelle Maldonado (D), who sponsored an AI algorithmic discrimination bill that was vetoed.
Major AI companies are lobbying behind the scenes in Washington, D.C., for light-touch national regulations that would preempt state rules, Politico reported.
The venture capital community warns that regulation will hamper AI startups and the United States’s ability to compete with China in an AI arms race. Free market advocates including Adam Thierer with the R Street Institute have amplified the view that regulations will stifle innovation. They have urged Congress to block state laws, saying state legislators have introduced upwards of 1,000 AI bills so far this year.
“The influence of venture capital, their views, are permeating the Trump administration and definitely leaking down to the state level,” said Connecticut Sen. James Maroney (D), who has emerged as a national leader on AI policy.
The rising resistance to regulations was on display in Colorado this month, when Senate Majority Leader Robert Rodriguez (D) introduced legislation to significantly narrow his state’s first-in-the-nation 2024 law to regulate high-risk AI systems. The changes didn’t go far enough for many in the tech sector, and the bill was killed in the waning hours of the legislative session.
A last-minute push by Polis and other top elected officials to delay the law’s start date to January 2027 also failed, raising the specter of a special session.
Read more: Colo. Gov signs AI regulation bill
Rep. Brianna Titone (D), the House sponsor of Rodriguez’s bill, called the situation “frustrating.” She said Colorado’s venture capital community was still not happy with the rewrite after months of negotiations.
“We want to make our policy better, but we don’t want to sacrifice consumer protections,” Titone said in an email.
A bipartisan, multistate effort to pass laws similar to Colorado’s — which aims to prevent AI systems from discriminating against people when used to make consequential decisions about their lives — has come up short, as bills failed in states including Georgia, Iowa, Maryland and New Mexico failed.
Elsewhere, lawmakers and regulators have been forced to scale back their ambitions.
Texas Rep. Giovanni Capriglione (R) overhauled his algorithmic discrimination bill after pushback from business groups and free market advocates.
Maroney this week stripped algorithmic discrimination language from a closely watched bill. His rewritten measure focuses instead on disclosure to consumers and incentivizing AI safety and worker retraining. The Senate passed it Wednesday.
California’s Privacy Protection Agency recently proposed weakening its AI regulations after pressure from Gov. Gavin Newsom (D).
Craig Albright, senior vice president for U.S. government relations at the Business Software Alliance, an industry trade group, predicted six months ago there would be a wave of AI legislation in states. While the volume of bills did increase this year, Albright said the politics and economics around AI regulation have changed.
“Opponents of AI regulation have been emboldened after the last election, and government officials are concerned that if they move too fast, they’re going to be hurt economically,” Albright said.
The push to pass laws to combat AI algorithmic bias has also become ensnared in the conservative backlash over diversity, equity and inclusion. Last month, U.S. Sen. Ted Cruz (R-Texas), chairman of the Commerce Committee, announced an investigation of a “woke AI nonprofit” that helped convene state lawmakers working on AI policy.
Despite the headwinds, AI algorithmic discrimination bills are still in play in states including California, Connecticut, Massachusetts, New York and Rhode Island. Bills focused on AI safety are also under consideration in California and New York. The New York bill recently won the endorsement of more than 50 experts and academics, including two so-called godfathers of AI.
Since 2024, 20 states have adopted laws regulating election-related deepfakes according to tracking by Public Citizen.
Advocates for AI regulations acknowledge a changed landscape but say the proposed federal moratorium is evidence that states are still formidable players in AI regulation.
“They wouldn’t have done this if they thought that the movement on this had culminated and petered out,” said Matthew Scherer, senior policy counsel for workers’ rights and technology at the Center for Democracy & Technology.