The United States has lagged other countries in AI regulation for years, but President Trump last week signed an executive order aimed at restricting states from enacting their own AI regulations.
According to the White House announcement and fact sheetThe executive order assesses and challenges state laws that “stifle innovation” with the goal of eliminating the “patchwork” of state regulations and creating a single national standard. However, details of that national standard are still lacking.
“There is no universal U.S. policy toward AI,” said Jack Gold, founder and principal analyst at J.Gold Associates. “What Trump is doing is saying, 'Okay, I don't know what that policy is going to be, but the states can't stand in the way.'”
Gold added that each state has unique needs and desires when it comes to AI regulation. States were waiting for federal regulation, but proposed and enacted its own laws For example, to limit the discriminatory use of AI in employment and address consumer protections related to AI systems.
However, these individual state AI laws can result in a patchwork approach that is difficult to manage. Michael Leone, practice director and principal analyst at Omdia, a division of Informa TechTarget, said that while state regulations could provide more nuance, that approach is not sustainable at scale.
“I think most people can agree that in the long term it's simply unsustainable to think we should do that.” [regulating AI] “At the state level,” Leone said, “the market is moving too fast.”
I think most people would agree that in the long term, what we think we should do is simply unsustainable. [regulating AI] At the state level.
Michael Leone, Omdia Practice Director and Principal Analyst
The United States is a world leader in AI development, he added. It is supported by states that foster companies that build innovative AI software without much oversight or regulation. However, state-level AI regulations require these companies to monitor each applicable law.
“If you look at this on a large scale, imagine there are 50 states with 50 different rules and laws,” Leone said. “If I were an employee of Microsoft, Google or Amazon, I would be exposing myself to so many legal battles that it would be detrimental to progress and recruitment.”
President Trump's executive order takes the following position: state can hinder AI innovation There are laws that create unnecessary red tape and hinder U.S. progress in the AI war with China.
“A carefully designed national framework can ensure America wins the AI race. We must do it,” the executive order said. “But until such a national standard exists, it is imperative that my administration take action to rein in the most burdensome and overreaching laws coming out of the United States that threaten to stifle innovation.”
The executive order calls for the creation of an AI Litigation Task Force, which will be responsible for challenging state laws that are “inconsistent with established policy.” According to the order, the Commerce Secretary will also publish an assessment of existing “onerous laws” at the state level.
But for both Leone and Gold, President Trump's proclamation is not enough.
“The problem I have with this kind of thing is that [executive order] All he's saying is, “Don't do anything.” I’m not going to do anything, but you can’t do anything either,” Gold said.
Leone said this creates a period of uncertainty as AI developers, states and companies wait for federal policy.
“There are many implications of not regulating from a political perspective,” Leone said. “We have set a dangerous precedent by prioritizing innovation at all costs in order to 'maintain competitiveness with China.'”
Who will win and who will lose?
Who benefits and who loses from the new executive order?
“The winner is clear,” Gold said. “It’s the AI companies that don’t want regulation.”
While this has the potential to speed up AI development, it also comes with risks. Until now, Gold said, most major AI companies have self-regulated and done minimal efforts to make their products safer, taking small steps to avoid lawsuits and negative publicity. As a result, these companies are constantly driving innovation. Considering the impactespecially issues such as child safety, prejudice, and copyright infringement.
“The ultimate losers will be end users like us who use either: [AI] They are directly affected by or affected by companies that use AI inappropriately or dangerously,” Gold said.
The ultimate losers will be end users like us who use either: [AI] directly or by companies that use AI inappropriately or dangerously.
Jack Gold, Founder and Principal Analyst, J.Gold Associates
Leone also noted the friction between the efficiency of AI and the democratic safeguards surrounding its innovation.
“If I'm a developer of an AI-based service, this is a good thing in terms of innovation,” Leone says. “It’s not very good in terms of safeguards, but the safeguards part is very important.”
Meanwhile, both Leone and Gold said they expect state regulators to resist the order at some level, either introducing new AI limits or keeping existing limits in place and leaving it up to the courts. It could take years to resolve it.
Time will determine when the United States finally establishes a universal AI framework and what that policy will include. But Leone said he hopes the order will spur regulatory progress.
“It would be nice if it turned out like this. [the order] “We're starting to open the eyes of Congress a little more to take action and push for bipartisan agreement on what regulations should be and why they should be the way they are,” Leone said.
Jennifer English is Editorial Director in TechTarget's AI & Emerging Tech group.
