A nationwide AI renaissance hinges on Congress enacting federal standards before state-level regulation stifles innovation and growth.
The rise of artificial intelligence is reshaping American life. Tools like ChatGPT and Grok are moving from novelty to necessity, as more people begin using them at work, in school, and at home. AI is speeding up productivity, unlocking new ideas, and changing how we function. This shift is not just technical. It is economic, cultural, and political. Like the arrival of electricity or the internet, AI could transform how the US grows and competes for centuries to come.
The Trump Administration Moves to Secure US Leadership
Thankfully, the Trump administration realizes the pivotal moment we live in for this technology. After months of careful assessment, the president signed an extensive executive order aimed at ensuring America’s global dominance over AI development and deployment. Coinciding with the White House’s broader deregulatory and manufacturing goals, the order includes provisions to streamline the permitting process for data centers and prioritize AI skills in workforce development funding.
States Are Racing Ahead With Restrictive AI Laws
State lawmakers from Sacramento to Albany are rushing to regulate AI technology in a panic. While the Trump administration seeks to unleash the growth of AI in America, thousands of state-level AI bills have been introduced in legislatures across the country, targeting cutting-edge frontier models like OpenAI’s ChatGPT and Google’s Gemini with endless safety requirements and audits. The country faces a choice: a nationwide technological renaissance or a politicized battle between the states and Washington.
Much of this political anxiety comes from widespread fears about how AI might be misused or disrupt daily life. Already, the potential dangers of deep fake images spurred Congress to introduce the NO FAKES Act. Worries over so-called “misinformation” and job displacement continue. But while some concern is justified, quickly adopting such sweeping regulations risks shutting down innovation before it is fully understood. We should be fostering experimentation, not freezing progress.
Overregulation Threatens Innovation and Open Source Development
Last year, California Gov. Gavin Newsom vetoed what many considered the most aggressive state bill yet: SB 1047. The legislation would have deemed Silicon Valley companies legally liable for any harmful misuse of AI platforms and effectively required the creation of a “kill switch” for large models — a vague mandate that could force developers to abandon open-source innovation entirely. New York now awaits the governor’s signature (or veto) on the Responsible AI Safety and Education (RAISE) Act, their own version of the California bill.
These pieces of legislation trap innovation and entrepreneurship in a web of legal red tape, hampering research and development and setting up barriers to entry for smaller firms. By crippling startup and investment opportunities in America for the next generation, millions of jobs and trillions in value — including the savings of workers, retirees, and public servants — hang in the balance.
Federal Action Is Needed to Prevent a Regulatory Patchwork
In response to the onslaught of state legislation, Congress introduced a temporary pause on state AI laws — enacted via a funding contingency — as a part of the budget reconciliation process. While it was ultimately removed from the Senate bill, the future of our economy depends on federal standards for AI and technology like the proposed pause. Trump’s executive order is a start, but Congress still needs to act.
A state-by-state patchwork of AI laws breeds uncertainty for business decision-making, resulting in long-term economic stagnation and an anti-competitive marketplace led by only a few major companies. The American tech sector needs a stable regulatory landscape to test out new technologies and build the products that best serve consumers.
With less compliance overhead, a federal AI framework will allow first-time founders and open-source projects to compete with well-lawyered, entrenched tech giants. Regulatory capture of AI technology by a few dominant firms has come dangerously close before. Policymakers must ensure that it never happens. The danger isn’t just government overreach. It’s the alliance of bloated agencies and risk-averse tech giants, each pretending to represent the public while mostly protecting themselves from competition.
A National AI Framework Would Unlock Growth and Reduce Costs
Streamlining AI law saves businesses big and small hundreds of millions, if not billions, in expensive legal reviews, state-mandated audits, and paperwork that buries early-stage teams. This extra cash could then be used to grow the company, improve employee pay and benefits, and try out new technologies — compounding the impact of a simple regulatory change.
Estimates suggest the federal government will save tens of billions in procurement and unlock hundreds more in tax revenue by stabilizing AI law. By addressing the federal fiscal crisis from both ends, a federal approach opens a new path to balancing the budget through economic growth and cost savings.
Rather than hampering new technology with bureaucratic waste, skeptics of AI should “prioritize regulating conduct, not models,” as recommended by Dean Ball, now a senior policy advisor at the White House Office of Science and Technology. As it stands, many existing laws, from product liability protections to anti-discrimination statutes, can already remedy various concerns with AI.
States Can Still Play a Role in Targeting Misuse
A federal approach would still allow state lawmakers to focus on prosecuting individual bad actors for misuse and protecting consumers from harm within their own states. The most updated version of the proposed pause specifically outlined exemptions for state-level laws regarding unfair and deceptive practice, civil rights, product recall, and other areas of law (such as musical artists’ image and likeness).
In the coming years, Congress must follow the White House’s lead on AI policy. The potential economic benefits of this new technology are enormous. American tech companies could bring new jobs and opportunities to cities across the country, but only if they’re able to operate in all 50 states. Guaranteeing the future requires leadership from the halls of the Capitol.
Without Congressional Action, AI Innovation Could Stall Nationwide
For now, the hodgepodge of state bills is slowly tying tech innovators in a bind. Executive action from the Oval Office can only hold it off so long. From third-party inspections to individual state audits, the push to advance AI and reach everyday Americans may soon find itself on hold. If Congress doesn’t act, now or soon, the promise of American AI will be lost in a mess of paperwork — before it even truly begins.
About the Author: Sam Raus
Sam Raus is the David Boaz Resident Writing Fellow at Young Voices. His commentary has appeared in USA Today, The Hill, Newsweek and RealClearPolitics. Follow him on X: @SamRaus1.
Image: Shutterstock
