The race to regulate AI has sparked a federal vs state showdown

The Great AI Regulation Debate: A Federal vs State Showdown

For the first time, Washington is getting close to deciding how to regulate artificial intelligence (AI). And the fight that's brewing isn't about the technology itself, but about who gets to do the regulating. This battle has sparked a heated debate between the federal government and individual states, with the tech industry firmly on one side.

The Patchwork Argument

The tech industry, and several of its transplants in the White House, is pushing for a national standard or none at all. They argue that a patchwork of state regulations will "slow us in the race against China." Josh Vlasto, co-founder of pro-AI PAC Leading the Future, told TechCrunch, "When you're trying to drive innovation in the tech sector, you can't have a situation where all these laws keep popping up from people who don't necessarily have the technical expertise."

The Industry's Position

Leading the Future, backed by Andreessen Horowitz, OpenAI president Greg Brockman, Perplexity, and Palantir co-founder Joe Lonsdale, has raised more than $100 million. This week, Leading the Future launched a $10 million campaign pushing Congress to craft a national AI policy that overrides state laws. Nathan Leamer, executive director of Build American AI, the PAC's advocacy arm, confirmed the group supports preemption without AI-specific federal consumer protections in place.

The State's Position

Meanwhile, states are moving quickly to adopt their own AI regulations. As of November 2025, 38 states have adopted more than 100 AI-related laws this year, mainly targeting deepfakes, transparency and disclosure, and government use of AI. Alex Bores, a New York Assembly member running for Congress, is one of Leading the Future's first targets. He sponsored the RAISE Act, which requires large AI labs to have safety plans to prevent critical harms.

The Federal Government's Position

Rep. Ted Lieu (D-CA) and the bipartisan House AI Task Force are preparing a package of federal AI bills that cover a range of consumer protections, including fraud, healthcare, transparency, child safety, and catastrophic risk. Lieu is drafting an over 200-page megabill he hopes to introduce in December. It covers a range of issues, like fraud penalties, deepfake protections, whistleblower protections, compute resources for academia, and mandatory testing and disclosure for large language model companies.

The Implications

The debate between the federal government and individual states has significant implications for the future of AI regulation. If the federal government prevails, it could lead to a more uniform set of regulations across the country. However, this could also stifle innovation and limit the ability of states to respond to emerging risks. On the other hand, if individual states continue to adopt their own regulations, it could lead to a patchwork of laws that are difficult to navigate.

The Future of AI Regulation

The future of AI regulation is uncertain, but one thing is clear: it will be shaped by the outcome of this debate. As AI continues to evolve and become more pervasive in our lives, it's essential that we have a clear and effective regulatory framework in place. The stakes are high, and the consequences of getting it wrong could be severe.

Conclusion

The great AI regulation debate is a complex and multifaceted issue that has significant implications for the future of AI. As we move forward, it's essential that we prioritize transparency, accountability, and innovation. By working together, we can create a regulatory framework that promotes the safe and responsible development of AI. The future of AI is bright, but it's up to us to ensure that it's also safe and beneficial for all.

Source: https://techcrunch.com/2025/11/28/the-race-to-regulate-ai-has-sparked-a-federal-vs-state-showdown/