AI firms craft state rules as White House, Congress stall
AI firms craft state rules as White – As the federal government remains bogged down in deliberations over a unified AI regulatory framework, leading artificial intelligence companies are taking matters into their own hands. Major labs are now actively lobbying state legislatures to draft their own rules, effectively creating a patchwork of policies across the country. This shift comes amid growing concerns over the pace of federal action and the urgent need for oversight in the rapidly evolving field of artificial intelligence.
State-Level Initiatives Outpace Federal Plans
Despite their shared support for a national safety standard, AI firms are acknowledging the practical challenges of waiting for federal legislation. With Congress moving at a glacial pace, states have emerged as key battlegrounds for shaping AI policy. The companies recognize that while a cohesive federal framework would ideally streamline regulations, the current political environment in Washington has made such a goal elusive. As a result, they are leveraging state-level initiatives to advocate for their positions and influence the broader national conversation.
OpenAI and Anthropic, two of the most prominent names in the AI industry, are among the firms actively collaborating with state lawmakers. Their strategy involves endorsing specific bills that align with their policy priorities, using these endorsements to signal support for similar federal measures. This approach has proven effective, as seen in the recent passage of multiple AI-related bills in blue states like Illinois, California, and New York. These states, often seen as progressive hubs, are now serving as testing grounds for comprehensive AI regulations.
“A form of … reverse federalism,” said Chris Lehane, OpenAI’s chief of global affairs, during an interview with The Hill. “You’re basically getting the states to replicate each other.”
Lehane, a former advisor to former President Bill Clinton, highlighted how this state-driven approach allows companies to pilot policies before they are scaled nationally. By focusing on key provisions such as transparency requirements, safety frameworks, and risk assessments, these firms aim to build momentum for a federal standard. The Illinois bill, S.B. 315, exemplifies this strategy, as it mirrors provisions from California and New York but introduces stricter measures for large AI developers.
Federal Efforts Lag Behind State Progress
The Trump administration has been a major player in the push for federal AI regulation, spending over a year attempting to secure congressional support for preemption laws that would limit state-level oversight. However, the House’s recent proposal has received mixed reactions, and ongoing negotiations in the Senate suggest that lawmakers are still far from consensus. With less than six months until the next Congress, the urgency for federal action remains high, but progress has been slow.
Lehane emphasized that the lack of federal legislation has compelled companies to explore alternative avenues. “In a perfect world where we could wave a magic policy / political wand, you would have legislation passed at the federal level that would establish required safety standards,” he explained. “As part of that, you have some type of very narrow preemption as it relates to those sort of catastrophic-type safety risks.” This indicates a strategic compromise, where companies are willing to accept state-level regulations as a temporary solution while pushing for federal alignment.
Public Concerns Fuel State Legislative Action
State lawmakers have been quick to respond to public anxieties about AI’s societal impact. Over the first half of this year, more than 1,500 bills addressing AI-related issues have been introduced across the United States. These concerns have intensified in recent months, driven by polls showing increasing fears among Americans about AI’s effects on employment, environmental sustainability, and national security. The demand for clarity and accountability has prompted states to act, even in the absence of federal guidelines.
OpenAI has been particularly active in supporting state legislation, with notable successes in Illinois. The AI Safety Measures Act, passed by Illinois legislators in July, requires large frontier developers to create, publish, and annually update AI frameworks that include assessments of catastrophic risks, cybersecurity threats, and other critical factors. This bill, which some argue is the strongest AI regulation to date, goes a step further than similar measures in California and New York by mandating third-party audits for companies generating over $500 million in annual revenue.
California’s S.B. 53, signed by Governor Gavin Newsom in October, established new transparency requirements for AI labs, including mandatory safety frameworks and incident reporting. While OpenAI initially expressed reservations about the bill’s audit provisions, the company later endorsed it, stating it advances a risk-based approach that prioritizes the most capable AI models. Similarly, the RAISE Act in New York, which was signed last year, requires developers to publish safety protocols and track incidents, aligning with OpenAI’s broader goals.
These state-level efforts are not without challenges. Some firms, like OpenAI, have previously opposed similar provisions in other bills, but the company has since adapted its stance. The shift reflects a growing recognition that state regulations can serve as a bridge to federal policy, allowing for gradual implementation and refinement. As Lehane noted, the goal is to create a de facto national framework by identifying common elements across state laws and advocating for their adoption at the federal level.
With the passage of these bills, the landscape of AI regulation is becoming increasingly complex. While the White House and Congress continue to debate the need for a unified standard, the momentum generated by state-level action is reshaping the conversation. The companies involved are not only navigating the political landscape but also responding to public demand for accountability, ensuring that their policies reflect both innovation and responsibility.
