Choosing America Over California in AI 

By Rohan Naval

On September 19, The House Judiciary Subcommittee on Courts, Intellectual Property, and Artificial Intelligence, held a hearing titled “AI at a Crossroads: A Nationwide Strategy or Californication?”

The hearing examined what a national strategy for artificial intelligence would look like. This builds off the White House’s recent work to develop a national AI action plan.  

The hearing also addressed a potential federal moratorium and pre-emption of AI regulation at the state level, like the one proposed in the One Big Beautiful Bill. 

Rep. Darrell Issa, chair of the subcommittee, opened by explaining the high stakes of artificial intelligence. He described US leadership in AI thusly: “We are the innovators, China are the duplicators, and Europe are the regulators,” a strong statement that he says is undercut by the fact that “California is trying to rival the EU on regulation.” He praised the AI Action plan and stated that it is time for Congress to act on the issue.

Kevin Frazier, an AI Innovation and Law Fellow at the University of Texas testified to the committee about the constitutional case for the federal government to have the sole power to regulate artificial intelligence. In his opening statement, he said that “our constitutional order does not condone one state to intentionally and substantially interfere with another.” He testified to the immense potential with the advent of AI and said that America will be less likely to realize the benefits of AI should state laws create a patchwork of regulations.  

Adam Thierer, an innovation, technology, and policy analyst for the R Street Institute, spoke in very bold terms about the need for a state moratorium on AI regulations, saying “Congress needs to act promptly to formulate a clear national policy framework for artificial intelligence to win the computational revolution.” He mentioned that close to a thousand bills are being considered on regulating artificial intelligence in statehouses across the nation, with fifty in California and close to one hundred and fifty in New York. Such a regulatory environment will be terrible for developers, and that “inconsistent standards will undermine market certainty and hurt investment, innovation, and competition.” 

Thierer likened the current situation with AI to Congress’ approach to the Internet in the 90s, and stated that the federal pre-emptions enacted then can serve as a guiding principle. He cited the Telecommunications Act of 1996 and the Internet Tax Freedom Act of 1998 as similar laws that helped the development of the internet, and reiterated the dangers of a fractured regulatory environment, noting that “America would not have become the global leader in digital technology if we had 50 state computer bureaus, or even a California Computer Commission, allowed to license every single aspect of computing and treat it as a regulated utility.” 

Chairman Issa closed the hearing by dispelling fears of any potential harms from AI; he noted that there are myriad state laws to address any harms, and that additional regulatory bills would merely harm AI developers rather than protect the rights of citizens.  

Digital Liberty calls on Congress to move forward with the recommendations of this hearing and enact a moratorium on state AI regulations or a federal pre-emption of such laws.