“The action is in the states, not D.C.,” he said. “That’s why some people in D.C. are trying to stop states … particularly California, who’s leading the pack.”
If this bill or a similar one in the future passes, Rossi expects it would get challenged in court and put a chilling effect on efforts to regulate AI by state lawmakers. It’s unclear whether it’s legal for the federal government to make a blanket moratorium on state regulation, said Winters, who worked in the U.S. Department of Justice during the Biden administration.
He agrees that the Byrd rule means the bill is unlikely to pass if it reaches the U.S. Senate, though Republicans may connect it to a $500 million plan to invest in AI for federal agencies and argue that it’s essential to limit state regulation in order to carry out certain budget provisions.
The House bill makes exceptions for states to continue enforcing some laws related to AI, such as laws that enable more use of AI or that are intended to improve government efficiency. It’s reasonable to interpret one of the exceptions to mean states like California could continue enforcing privacy law if this bill passed, said Amba Kak, codirector of The AI Now Institute, a research and equitable AI advocacy organization. But doing so is risky.
“We can’t count on the fact that courts will see it this way, especially in the context of an otherwise sweeping moratorium with the clear intention to clamp down on AI-related enforcement,” she said.
A House AI task force spent years discussing areas of bipartisan agreement and possible bills to pass to regulate AI, New York Democrat Alexandria Ocasio-Cortez said in a hearing about the moratorium, but Congress was unable to pass any of that legislation. During that time, people committed suicide from their interactions with chatbots and kids and teens were harmed by falsely generated sexually exploitative deepfakes, and so states decided to act to do things like force AI chatbots to protect the private information of people seeking mental health care in Utah and require chatbots include a protocol for when someone expresses the desire to commit self harm in New York.
“All of these protections are protections that Congress refuses to take up, refuses, and so states are taking up this responsibility,” Ocasio-Cortez said. “Let states protect people. A moratorium is a deeply dangerous idea at this moment.”
Congresswoman Doris Matsui, a Democrat from the Sacramento area, echoed Ocasio-Cortez at the hearing, saying, “We can’t shoot ourselves in the foot by stopping the good work states have done and will continue to do.”
Supporters of the moratorium identify different sorts of harm if it doesn’t pass. A patchwork of state regulations of AI “is the fastest way to secure Chinese dominance of AI,” said Jay Obernolte, a Republican from California and co-chair of the House AI task force. He supports a moratorium, and if Congress fails to act, he said the people it will hurt most are entrepreneurs who can’t afford to follow regulatory regimes passed by different states.
“The most destructive thing is if there’s fear out there that every few years as the winds of political fortune shift, the rules governing the use of AI completely change,” he said during the hearing.
Broader pushback against AI regulation
The proposed moratorium is in line with efforts to prevent regulation of AI by President Donald Trump and Vice President J.D. Vance, who say such regulations will stifle innovation. A White House plan to promote growth of the AI industry and likely reduce regulation is due out by this summer. Companies like Amazon, Google, Meta, and big businesses who use AI have lobbied in Sacramento and Washington, D.C., to prevent regulation of the technology.
Guthrie’s proposal comes a few days after Sen. Ted Cruz, a Republican from Texas, pushed for “light touch” AI regulation to ensure the United States maintains AI supremacy over other nations and to, in Cruz’s words, “prevent needless state over-regulation.”
The intent of Guthrie’s bill, Winters believes, is to send a signal to tech companies and open up the door to possible future legislation if the budget reconciliation bill fails to pass. It’s a trend consistent with Senator Cruz’s statement last week and efforts to remove red tape for data center projects on federal land.
“I’d describe this as … explicitly saying we are supporting the AI companies more than the American people,” he said. “We’re seeing an explicit turn toward a deregulatory state.”
Federal lawmakers have steadily increased the number of bills they propose related to AI in recent years, but they have passed relatively few of them into law, according to the AI Index report. Out of more 220 bills proposed last year, only four passed.
By contrast, state lawmakers passed more than 130 bills to regulate AI last year. California passed 22 bills last year, more than any other state, and attempted to harmonize its rules with the European Union’s AI Act and other U.S. states. The 2024 State of State Tech Policy report, from NYU’s Center for Social Media and Politics, found a 163% increase in tech policy proposals by state lawmakers last year compared to 2023. That trend is driven by one-party control in the vast majority of state houses across the country.
The adage that states are the laboratories of democracy is still true, said Scott Brennen, a coauthor of the State of State Tech Policy report, so shutting down their ability to try out different approaches doesn’t seem like a good idea and could undercut the federal government’s ability to make better policy. Since AI is getting integrated into an ever-wider range of tools, Guthrie’s moratorium appears to apply widely, he added, including to social media platforms, ongoing efforts by states to protect children online, and data privacy protections that address automated decision making.
“I don’t necessarily think state regulation of AI is always the best course of action, there are definitely areas like consumer data protection where it would be better if the federal government took the lead, but the federal government isn’t taking the lead,” he said.
This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.
