According to TechCrunch, Washington is finally getting close to deciding how to regulate artificial intelligence, but the brewing fight isn’t about the technology itself—it’s about who gets to do the regulating. In the absence of federal standards, states have introduced dozens of AI bills, including California’s SB-53 and Texas’s Responsible AI Governance Act. Tech giants argue these create an unworkable patchwork that threatens innovation and could “slow us in the race against China,” according to Josh Vlasto of pro-AI PAC Leading the Future, which has raised over $100 million from backers like Andreessen Horowitz and OpenAI’s Greg Brockman. Meanwhile, House lawmakers are reportedly trying to use the National Defense Authorization Act to block state AI laws, while a leaked White House executive order draft shows the administration considering its own preemption strategy that would give Trump’s AI and Crypto Czar David Sacks co-lead authority. As of November 2025, 38 states have adopted more than 100 AI-related laws this year alone.
Federal vs state showdown
Here’s the thing: this isn’t just some abstract policy debate. There are real consequences for how quickly AI gets deployed and what protections consumers actually get. The tech industry’s argument about a “patchwork” of state regulations being unworkable? I’m skeptical. These same companies already comply with much stricter EU regulations, and most industries manage to operate under varying state laws. Basically, when industry lobbyists say “patchwork,” what they often mean is “we don’t want to be accountable to anyone.”
And let’s talk about David Sacks potentially getting co-lead authority on creating a “uniform legal framework” through that leaked executive order. This is the same guy who’s publicly advocated for keeping federal oversight minimal and favors industry self-regulation to “maximize growth.” Giving a venture capitalist direct influence over AI policy that supersedes the White House Office of Science and Technology Policy? That seems like putting the fox in charge of the henhouse.
The patchwork argument
The industry’s pushing this narrative that state regulations will cripple innovation, but look at the actual numbers. A recent study found that 69% of state AI laws impose no requirements on AI developers at all. Most are targeting specific issues like deepfakes or government use of AI. Meanwhile, Congress has been glacially slow—Rep. Ted Lieu has introduced 67 bills to the House Science Committee since 2015, and only one became law.
Nathan Leamer from Build American AI actually admitted their position: they support preemption without AI-specific federal consumer protections in place. His argument? Existing laws addressing fraud or product liability are sufficient. But here’s the problem: AI creates entirely new types of risks that existing laws weren’t designed to handle. Waiting for harm to occur before acting means consumers become guinea pigs.
States moving faster
The reality is states are filling a vacuum. With 38 states passing over 100 AI laws this year alone, they’re responding to real concerns from their constituents. New York Assembly member Alex Bores, who’s being targeted by Leading the Future for sponsoring the RAISE Act, put it well: “I believe in the power of AI, and that is why it is so important to have reasonable regulations.”
And the pushback against preemption is significant. More than 200 lawmakers signed an open letter opposing preemption in the NDAA, arguing that “states serve as laboratories of democracies.” Nearly 40 state attorneys general also sent their own letter opposing a state AI regulation ban. That’s not exactly a fringe position.
What’s next
Rep. Lieu is drafting a 200-page megabill he hopes to introduce in December, covering everything from fraud penalties to mandatory testing for large language models. But he’s being realistic—he acknowledged his bill “wouldn’t be as strict” as some proposals but has a better chance of passing a Republican-controlled government. “I’m not writing a bill that I’d have if I were king,” he told TechCrunch.
So where does this leave us? The industry wants federal standards that override state laws, but they don’t seem particularly eager for strong federal protections either. States are moving faster to address real concerns, but face well-funded opposition. And everyone’s watching China while arguing about who gets to make the rules. One thing’s clear: this fight over who regulates AI will shape the technology’s development for years to come—and the outcome is anything but certain.
