Coalition Asks US House to Reject Freeze on State AI Regulations

More than 140 organizations are asking U.S. House leaders to reject a proposed 10-year freeze on state-level regulation of artificial intelligence (AI), saying it would remove corporate accountability for any harms arising from the technology.

According to The Hill, the group sent a letter this week to House Speaker Mike Johnson, R-La., House Minority Leader Hakeem Jeffries, D-N.Y., and other members of Congress criticizing a provision tucked into the House’s tax and spending bill.

“This moratorium would mean that even if a company deliberately designs an algorithm that causes foreseeable harm — regardless of how intentional or egregious the misconduct or how devastating the consequences — the company making that bad tech would be unaccountable to lawmakers and the public,” the letter stated.

“We urge Congress to reject this provision,” they wrote.

The list of signatories includes civil society groups, academic institutions, artists and technology workers, including Amazon Employees for Climate Justice, Public Citizen and the Alphabet Workers Union, which represents employees at Google’s parent company.

The provision, which is part of President Donald Trump’s bill, would stop states from enforcing laws over AI systems for the next decade.

In a recent Congressional hearing, tech leaders told lawmakers that one of the issues hampering progress in AI is the patchwork of state AI regulations that make it more difficult to comply since requirements vary.

OpenAI CEO Sam Altman told legislators that “light-touch” regulations would support AI infrastructure and supply chain advances. Other executives that testified — AMD CEO Lisa Su, CoreWeave CEO Mike Intrator and Microsoft President Brad Smith — also urged Congress to solve the issue of unwieldy state-level AI regulations.

Read more: Regulatory Uncertainty Shifts Middle-Market CFOs’ Focus Toward Compliance and Risk Management

The provision does contain carveouts for state measures that “remove legal impediments” or “facilitate the deployment or operation” of AI systems, as well as laws that “streamline licensing, permitting, routing, zoning, procurement or reporting procedures.”

It also would allow state laws that do not impose any substantive “design, performance, data-handling, documentation, civil liability, taxation, fee, or other requirement” on AI systems, The Hill reported.

The bill that contains the provision was approved by the House Budget Committee on Sunday, although the full bill still awaits a vote by the House.

The coalition argued that state efforts to regulate AI have so far focused on protecting residents from potential dangers that can emerge from unregulated AI use.

“As we have learned during other periods of rapid technological advancement, like the industrial revolution and the creation of the automobile, protecting people from being harmed by new technologies, including by holding companies accountable when they cause harm, ultimately spurs innovation and adoption of new technologies,” the letter stated.

“In other words, we will only reap the benefits of AI if people have a reason to trust it.”

See also: The Investment Impact of GenAI Operating Standards on Enterprise Adoption

The coalition’s concerns echo PYMNTS data, which shows that more than a third of CFOs surveyed see the lack of standards as an impediment to companies investing in GenAI.

That report examined how CFOs navigate GenAI investment decisions and drew on insights from 60 CFOs at U.S. firms generating at least $1 billion in revenue, surveyed from Jan. 8 to Jan. 16. The data also showed 42% of companies already using AI tools are unwilling to implement GenAI due to governance concerns.

The debate over whether states should retain authority to regulate AI comes amid growing calls from the tech industry for a single federal standard.

Industry leaders argue that a national framework is needed to avoid a patchwork of conflicting rules. However, critics of preemption say Congress has failed to pass meaningful legislation on AI, leaving states to fill the gap.

“Congress’s inability to enact comprehensive legislation enshrining AI protections leaves millions of Americans more vulnerable to existing threats described above such as discrimination and all of us exposed to the unpredictable safety risks posed by this nascent industry,” the coalition warned in its letter.

Read more: From Spark to Strategy: How Product Leaders Are Using GenAI to Gain a Competitive Edge

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