Trump Administration Uses Federal Preemption to Block State AI Laws
Key Takeaways
- The Trump administration has pressured states to scale back state AI legislation over federal preemption concerns, threatening to withhold federal funding like broadband dollars from states that pass regulations deemed too restrictive.
- Tennessee's frontier AI model bill was gutted after White House intervention, with the Trump administration's AI regulation efforts focusing on blocking California-style safety requirements while allowing states with companion chatbot regulations to proceed with child protection measures.
- Missouri's comprehensive AI liability bill faced pushback over the potential loss of $900 million in federal broadband funding, demonstrating how the administration is using financial leverage to influence state AI bills.
- Multiple frontier AI model laws in Nebraska, Florida, and Utah have stalled or been amended following federal pressure, creating a regulatory vacuum where only child safety measures are advancing while broader AI governance remains unsettled.
- States are increasingly focusing on companion chatbot regulations as a safer path forward, since the federal executive order explicitly exempts child safety measures from its preemption framework.
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The Trump administration has made clear that it views AI regulation as a federal prerogative, favoring a hands-off approach to promote innovation in what it sees as an international competition against China. While that approach has received pushback, even from fellow Republicans, the administration has been willing to use both carrots and sticks to keep states in line. While Congress continues to work on federal artificial intelligence legislation, the White House has been shaping state AI legislation through lobbying and political pressure.
At a hearing before the Senate Judiciary Committee on March 24, Tennessee Sen. Ken Yager (R) touted his artificial intelligence bill (TN SB 2171) that would protect children by regulating large frontier AI models and companion chatbots. “Dear to my heart, it protects children,” he told the committee, recounting stories of families affected by the harms of companion chatbots. But when he testified on the bill before the Senate Committee on Labor and Commerce two weeks later, he supported an amendment that stripped the bill of the frontier model regulations.
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