AI preemption debate reignites concerns over cost, safety

US lawmakers are reconsidering federal preemption of state AI laws to prevent a fragmented regulatory environment.

President Donald Trump, Sen. Ted Cruz, R-Texas, and the U.S. Chamber of Commerce support a moratorium on state and local AI rules, potentially enacted through the National Defense Authorization Act or an executive order.

A 10-year pause would save the federal government $600 billion between 2026 and 2035, according to an analysis from the Computer & Communications Industry Association (CCIA). The group attributes the projected savings to lower procurement costs and increased tax revenue from an AI-driven productivity boom.

"Fiscal sustainability requires both spending discipline and faster growth," said Trevor Wagener, chief economist and research center director at the CCIA. "Federal preemption of discriminatory state AI rules advances both goals at once by cutting procurement costs today while planting the seeds for higher economic growth and federal revenues tomorrow. Congress should seize this rare policy lever that aligns innovation, abundance and fiscal responsibility."

When asked by reporters in a Dec. 1 press conference, House Minority Leader Hakeem Jeffries (D-NY), said the proposal "hasn't been brought to the leadership level yet."

Opponents warn stripping state authority could undermine consumer protections. They argue states play a critical role in regulating privacy, safety and discrimination.

"Forcing AI law preemption would be a massive blow to state laws safeguarding kids online, supporting workers facing automation and protecting privacy for Americans," said Brad Carson, president of Americans for Responsible Innovation.

Politico reported that The White House plans an executive order allowing the federal government to override state regulations. The directive would instruct the United States Department of Commerce to review state laws and withhold broadband funding from states with rules deemed "onerous."

The order would also direct the FCC to assess a federal AI rule preempting conflicting state reporting and disclosure requirements.

"We MUST have one Federal Standard instead of a patchwork of 50 State Regulatory Regimes," Trump wrote on social media. "We can do this in a way that protects children AND prevents censorship!"

Nat Purser, senior policy advocate at Public Knowledge, noted that while the organization agrees with the desire for a unified standard, "only Congress can actually enact one."

"And they should — a framework for AI regulation is critical to ensuring consumer trust and driving innovation," Purser said. "Where Congress has failed to act, states have stepped up. The President has no authority or power to overrule them by decree."

The National Conference of State Legislatures (NCSL) argues states are leading the development of responsible, bipartisan AI policy.

"NCSL strongly opposes any effort to override state-level artificial intelligence laws whether through executive action or legislation," NCSL President Marcus Evans Jr. and President-elect Barry Usher said in a joint statement. "These attempts undermine the democratic process and disregard the extensive bipartisan work already underway in state legislatures. The best path forward is partnership, not preemption."

Evans is the assistant majority leader in the Illinois House, while Usher is the majority whip in the Montana Senate.

The White House and Commerce Department did not respond to requests for comment.

What's happening this week?

Below is a list of hearings, webinars and other tech, media and telecom-related events taking place virtually and in person in the nation's capital and beyond this week:

Dec. 2

➤ Center for Democracy & Technology: Human Oversight in AI for Public Benefits

➤ Senate Commerce, Science, and Transportation Subcommittee on Communication, Media, and Broadband: Hearings to examine America's communications networks

➤ Senate Foreign Relations Subcommittee on East Asia, the Pacific, and International Cybersecurity Policy: Hearings to examine China's challenge to American AI leadership

Dec. 3

➤ American Enterprise Institute: How a Senate Hold on a 2015 Cyber Law Is Undermining America’s Cybersecurity Agency

Dec. 3-5

➤ Office of the United States Trade Representative: Public Hearing Relating to the Operation of the Agreement Between the United States of America, the United Mexican States, and Canada

Dec. 4

➤ Information Technology & Information Foundation: Defending American Tech in Global Markets

➤ The Brookings Institution: Opportunities and challenges in AI regulation

➤ House Science, Space, and Technology Subcommittee on Space and Aeronautics: Strategic Trajectories — Assessing China’s Space Rise and the Risks to U.S. Leadership

Dec. 5

➤ Massachusetts Institute of Technology Center for Energy and Environmental Policy Research: Revitalizing America's Critical Mineral Industry