Utah Wants to Solve Washington’s AI Deadlock. Here’s How. 

Utah Rep. Mike Kennedy is pushing Congress to adopt his state’s approach to AI oversight, according to the Deseret News. The model, known as a regulatory “sandbox,” lets companies test AI products under government supervision before formal rules are written. Utah launched the program in 2023, making it the first state to create a dedicated AI policy office with authority to strike liability agreements directly with AI companies.

The idea is straightforward. Instead of regulators writing rules in advance, companies operate under temporary agreements with the state. The state watches what happens, gathers feedback, and then drafts rules based on real-world results. It’s a learn-as-you-go approach to a technology that is moving faster than traditional lawmaking can follow.

The model has already produced results. Utah passed laws in 2025 governing AI-powered mental health chatbots, expanded protections against AI identity abuse, and set disclosure requirements for certain businesses. Most recently, the state approved an agreement with a company exploring AI-generated prescriptions for common medications. That announcement drew significant interest from other businesses looking to operate in Utah.

The political stakes are high. President Trump called on Congress in March to pass legislation preempting state AI laws, arguing that a patchwork of different rules across 50 states creates a compliance nightmare for companies. The goal is a single, light-touch national standard. But the proposal has gone nowhere. Democrats say it gives AI companies too little accountability. Consumer advocates, including some from Republican-leaning states, warn that replacing stronger state protections with a weaker federal standard would leave the public exposed.

Read more: Ban On State AI Laws Facing Mounting Opposition From State Policymakers

Kennedy believes Utah’s sandbox offers a way out of that impasse. He met earlier this month with Utah Gov. Spencer Cox and state legislative leaders to discuss bringing the model to Washington.

“If I can represent that to the administration, they might just lift the template that already is working and put it into whatever this federal policy ends up being,” Kennedy told the Deseret News, “and lo and behold, Utah is driving the process in a functional way.”

The idea already has some traction at the federal level. Last September, Senate Commerce Committee Chair Ted Cruz i(R-TX) introduced the SANDBOX Act, which would give the White House Office of Science and Technology Policy the power to temporarily waive outdated regulations so AI developers can launch new products. Chris Koopman, CEO of the Utah-based Abundance Institute, told the Deseret News the bill reflects Utah’s influence on the national conversation.

Not everyone is convinced the sandbox approach solves every problem. Critics note that even a well-designed federal sandbox could be weakened by political pressure from industry. Peter Wildeford of the AI Policy Network told the Deseret News that any national framework needs to be at least as strong as what states have already put in place on their own.

What comes next will likely depend on timing. Koopman told the Deseret News that actual bill drafting on Trump’s AI framework hasn’t started yet, and the process is expected to move forward this summer. That gives Kennedy and Utah’s delegation a window to shape the legislation before it takes form.

The outcome could set the terms for how AI is regulated across the entire U.S. economy for years to come.