With federal AI legislation stalled, states like Illinois, California, and New York are passing their own AI safety laws. Leading AI labs are endorsing these bills, recognizing that this state-level patchwork is effectively becoming the national standard for AI governance in the U.S.

The White House's proposed legislative framework explicitly recommends against creating a new, overarching federal body to regulate AI. Instead, it advocates for empowering existing agencies with subject-matter expertise (e.g., in finance or healthcare) to develop and enforce AI rules within their own domains, suggesting a decentralized approach to governance.

Despite the risk of a fragmented legal landscape, the slow pace of federal AI legislation makes state-level action essential. States are acting as "laboratories of democracy," pioneering regulatory approaches that can later inform a much-needed national framework.

The policy advocates for preempting state laws that regulate AI development, viewing it as an interstate issue. However, it carves out an exception, allowing states to enforce laws against the harmful applications of AI, such as AI-generated child sexual abuse material. This creates a development vs. use distinction for regulatory authority.

A16z proposes a federalist approach to AI governance. The federal government, under the Commerce Clause, should regulate AI *development* to create a single national market. States should focus on regulating the harmful *use* of AI, which aligns with their traditional role in areas like criminal law.

OpenAI's policy blueprint diverges from the broad preemption in the Obernolte-Trahan bill. The company supports preempting state laws only on "the same frontier safety risks," a more targeted approach. This signals a strategic preference for focused federal oversight rather than a blanket ban on state-level regulation.

The idea of individual states creating their own AI regulations is fundamentally flawed. AI operates across state lines, making it a clear case of interstate commerce that demands a unified federal approach. A 50-state regulatory framework would create chaos and hinder the country's ability to compete globally in AI development.

A draft bipartisan AI bill includes a three-year preemption of all state laws regulating AI development. Critics fear this is overly broad, as it could prevent states from legislating on critical issues the federal bill itself doesn't address, such as children's safety online.

Advocating for a single national AI policy is often a strategic move by tech lobbyists and friendly politicians to preempt and invalidate stricter regulations emerging at the state level. Under the guise of creating a unified standard, this approach effectively ensures the actual policy is weak or non-existent, allowing the industry to operate with minimal oversight.