President Donald Trump’s AI Action Plan released on July 23 issues a warning to states that create their own regulations for artificial intelligence technologies by saying those states should not be recipients of Federal government AI-related funding going forward.
The White House’s long-awaited AI Action Plan sets forth dozens of Federal AI-related policy goals. Among those are easing permitting requirements to promote faster buildouts of data centers and semiconductor manufacturing plants in the United States, directing greater adoption of AI services by the Federal government, and planning for new rules that will allow for exports of “full-stack” AI technology packages to U.S. friends and allies.
Also featured within the AI Action Plan is a prominent shot across the bow of states that either have or may be contemplating creating their own AI-related regulations.
Under a heading of the action plan titled “Remove Red Tape and Onerous Regulation,” the plan states that “America’s private sector must be unencumbered by bureaucratic red tape” in order to “maintain global leadership in AI.”
“AI is far too important to smother in bureaucracy at this early stage, whether at the state or Federal level,” the plan says.
“The Federal government should not allow AI-related Federal funding to be directed toward states with burdensome AI regulations that waste these funds,” the plan says.
The action plan also appears to leave wiggle-room on that point by stating that the Federal government “should also not interfere with states’ rights to pass prudent laws that are not unduly restrictive to innovation.”
The White House order says that the Office of Management and Budget (OMB) is being tasked with examining whether states have AI regulations and what that means for any future Federal AI funding involving those states.
OMB, the order says, will “ work with Federal agencies that have AI-related discretionary funding programs to ensure, consistent with applicable law, that they consider a state’s AI regulatory climate when making funding decisions and limit funding if the state’s AI regulatory regimes may hinder the effectiveness of that funding or award.”
The White House order also tasks the Federal Communications Commission with evaluating “whether state AI regulations interfere with the agency’s ability to carry out its obligations and authorities under the Communications Act of 1934.”
More generally, the White House plan states that “America must have the most powerful AI systems in the world, but we must also lead the world in creative and transformative application of these systems.”
“Achieving these goals requires the Federal government to create the conditions where private-sector-led innovation can flourish,” the plan says.
The plan’s language on state AI regulation follows recent action by Congress to defeat a proposal in recent reconciliation funding legislation that would have prohibited states from creating AI regulations for a 10-year period.
That proposal was initially approved in the House version of the bill but later was rejected by the Senate by a vote of 99-1 and was stripped from the final version of the legislation.