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Federal vs. State: Lawmakers Clash Over AI Regulation Authority

By  |  September 24, 2025

Lawmakers in Washington are clashing over whether artificial intelligence should be regulated primarily by the states or under a single nationwide framework. During a hearing of the House Judiciary Subcommittee on Courts, Intellectual Property, Artificial Intelligence, and the Internet, members weighed competing visions for who should have the final say in shaping AI rules. According to Bloomberg, while both parties expressed support for a federal baseline, deep divisions emerged over whether Washington should override state authority.

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    The debate came shortly after the Senate voted 99-1 to reject a proposal that would have blocked states from passing or enforcing their own AI laws for the next decade. That setback shifted momentum to the executive branch, where officials are considering an AI Action Plan that could cut federal funding to states imposing regulations viewed as excessive. Per Bloomberg, the proposal underscores how far-reaching the fight has become, with implications for innovation, child protection, and national competitiveness.
    Witnesses at the hearing largely agreed that the United States needs a comprehensive federal framework to govern AI. They also emphasized the importance of protecting against potential harms, particularly to children, while ensuring technological development continues. Still, Republicans on the panel signaled concern about a “patchwork” of state rules. Representative Darrell Issa of California argued that fragmented regulations could slow U.S. innovation and hand an advantage to rivals like China. “We must continue to produce the next-generation AI, and we cannot do it with a patchwork of conflicting state laws,” Issa said during the session.

    Read more: US DOJ Signals Scrutiny of Antitrust Risks in AI Sector

    Bloomberg reported that industry advocates have pushed for stronger federal preemption, warning that dozens of states, including California, are already advancing their own regulatory approaches. Democrats, meanwhile, indicated they were wary of going too far in stripping state powers, describing broad preemption as potentially reckless. With Congress stalled, experts say the next moves may rest with the executive branch, which could use federal funding as leverage to shape how states handle AI oversight.

    Source: Bloomberg