As of November 2025, 38 U.S. states have passed more than 100 AI–related laws this year alone, addressing issues such as deepfakes, transparency, disclosure requirements and government use of AI — highlighting how state governments have aggressively stepped in amid slow movement in Congress. Meanwhile, many federal lawmakers and tech-industry supporters are pushing to preempt state regulation with a unified national standard, arguing that a patchwork of divergent laws threatens innovation and burdens businesses. At the same time, opponents warn that overriding state-level control undermines local flexibility and removes a crucial layer of public protection.
Sources: Reuters, TechCrunch
Key Takeaways
– States have taken the lead: In 2025 alone, dozens of states passed AI laws targeting deepfakes, transparency and public-sector AI deployment, showing they won’t wait for federal action.
– Risk of a regulatory patchwork: With every state writing its own rules, businesses operating nationally face inconsistent compliance burdens — a headache for small and medium enterprises.
– National preemption under debate: Federal efforts to block state AI laws are gaining support in some political and tech circles, but critics argue this undermines state autonomy and public safeguards.
In-Depth
Artificial intelligence is accelerating faster than lawmakers can keep up — and because of that, states across the U.S. are filling the void. According to a recent report from the Council of State Governments, many state legislatures made AI their top priority in 2025, introducing and enacting a flood of AI–related legislation. By November, 38 states had already passed more than 100 AI laws, targeting everything from deepfakes and bias in algorithmic decision-making to transparency and government use of AI tools. For many state governments, waiting for Washington simply isn’t an option when the implications for elections, privacy, employment, and public services feel immediate.
On the federal side, progress has been far slower. Although hundreds of bills have been introduced over several years, only a handful have cleared the finish line. That sluggish pace has fueled impatience among state lawmakers — but also concern in business and tech circles. Major industry players and some federal lawmakers argue that a disparate patchwork of AI laws will hinder innovation and make compliance nearly impossible for companies operating nationally. They warn that without a unified standard, American firms’ competitive edge will erode, especially compared to countries with national AI regulatory frameworks.
That concern has led to renewed efforts to preempt state AI regulation at the federal level. Advocates for federal preemption argue that one national framework ensures consistency, reduces litigation and makes it easier for companies to operate across state lines. Proponents of this approach claim it will also help America stay ahead in the global AI race, especially against rivals like China or European countries with centralized regulation. But critics — including many state attorneys general — push back hard, saying preemption strips away the ability of states to respond quickly to local challenges, hold AI makers accountable, and protect citizens from real-world harms like deepfakes, bias, and privacy violations.
For small businesses, the consequences could be serious either way. If states continue writing their own rules, these firms may face a confusing web of requirements that inflate compliance costs and discourage adoption of AI tools. On the other hand, if federal preemption wins out, it might spare small businesses from a regulatory thicket — but at the potential cost of loosening necessary safeguards under a broad, industry-friendly national standard. Either outcome represents a major pivot in how America governs cutting-edge technology; the only certainty is uncertainty itself.