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Diving briefs:
- A majority of small business owners are concerned about the impact that AI regulations will have on organizations, according to a U.S. Chamber of Commerce research.
- Almost two-thirds of respondents (65%) were concerned about compliance and legal costs that could be attributed to a 14% point increase compared to the 2024 poll, which could be subject to different state laws on privacy, AI and technology, according to survey results released Monday.
- “This year, we discovered the highest level of concern among small businesses in a patchwork of state law that could potentially stifle recruitment and growth,” said Jordan Crenshaw, senior vice president of the Chamber of Commerce's Technology Engagement Center, in a statement. “That's why policymakers need to establish a single national framework that allows these businesses to thrive rather than curb success.”
Dive Insights:
Many states have proposed or implemented regulations that require businesses to disclose their use of AI to their customers, conduct risk assessments for AI, explain to customers how AI affects customer interactions, and provide human monitoring of the system that makes the consequential decisions, according to the report. One in one respondent said they were prepared to comply with such obligations.
Among other recommendations, the report called for a national AI framework that preempts comprehensive state AI laws. “While maintaining the ability of the State Attorney General to enforce neutral legislation, where necessary, technology to address certain harms such as consumer protection, privacy and discrimination laws.”
The findings are because the Trump administration threatens to withhold federal AI funds from states with burdensome technical rules.
An AI Action Plan, released last month by the White House, calls on the Department of Management and Budget to work with federal agencies with discretionary AI-related funding programs to consider the state's AI-regulated environment when making funding decisions.
“The federal government should not allow AI-related federal funds to be directed to states with burdensome AI regulations that waste these funds, but should not interfere with states' rights to pass prudent laws that are not overly restricted by innovation,” the document says.
Meanwhile, President Donald Trump is ahead of his own plan, calling for a federal AI standard of “supporting all states.”
As of June 27, a total of 260 state measures related to AI were introduced at the 2025 legislative meeting, according to an analysis by the Brookings Institution.
Analysts say the Colorado AI Act, which is passed in 2024 and is expected to come into effect next year, stands out for its breadth and inclusiveness. Other states with AI law include New York, Texas and California.
“There is a storm cloud in this progress at the federal level, and it is unclear how this will affect how the state is dealing with AI,” the Brookings report said.
