AI Regulation: The Feds v. The States

The federal government and various states have taken conflicting approaches to AI regulation.  The feds favor a “hands off” approach as set forth in President Trump’s 2025 Executive Order. In contrast, many states have taken a more aggressive approach to AI regulation.  Ropes & Gray recently published a client alert addressing the competing federal and state agendas for AI regulation and what the conflict between the feds & states may mean for companies developing or using AI tools in their businesses.  Here’s an excerpt from the memo’s conclusion:

The Executive Order directs federal agencies to utilize existing federal laws and forthcoming regulations to challenge state laws that conflict with the administration’s deregulatory posture toward AI, but those efforts may face stiff resistance in court. The viability of the administration’s legal theories is uncertain, particularly in light of the Executive Order’s acknowledgement of the absence of a federal regulatory framework and Congress’s rejection of recent efforts to preempt state AI laws. Accordingly, it remains unclear how far the administration’s preemption arguments will sweep.

In the near term, stakeholders should closely monitor the litigation and policy landscape. The Executive Order is likely to result in the issuance of significant policies by federal agencies designed to preempt conflicting state laws, including a policy statement by the FTC on Section 5 of the FTC Act, a policy notice by the Department of Commerce on BEAD Program funding, potential regulatory efforts by the FCC, and potential conditions on federal grant funding.

The memo says that stakeholders should expect to see plenty of litigation from the DOJ and the AI Litigation Task Force challenging state laws that interfere with or obstruct the Executive Order’s vision of a uniform national AI policy protected against contrary state regulation. It also says that private litigants and sympathetic states are expected to bring claims challenging state AI laws, and that the Executive Order may help push Congress to enact uniform national AI legislation.