Dive Brief:

• Federal preemption of state-level artificial intelligence regulation would result in a “fiscal windfall,” saving the federal government about $600 billion through 2035, according to an analysis by the Computer and Communications Industry Association.
• The research, highlighted in a Friday blog post, comes amid reports that members of Congress are considering attaching such preemption language to a must-pass annual defense authorization bill.
• “Congress should seize this rare policy lever that aligns innovation, abundance, and fiscal responsibility,” Trevor Wagener, chief economist at CCIA, said in the blog post. The trade association lobbies for companies such as Amazon, Apple, Meta and Google.

Dive Insight:

The savings from 2026 through 2035 would come from $39 billion in lower procurement costs for the federal government due to increased productivity of federal contractors, and $561 billion in higher federal tax receipts “flowing from an AI-enabled jump in GDP resulting from the AI boost to productivity,” Wagener said.

AI laws are rapidly piling up at the state level, creating a complex patchwork of requirements for businesses. It’s an issue that is increasingly gaining attention in Washington.

“We MUST have one Federal Standard instead of a patchwork of 50 State Regulatory Regimes,” President Donald Trump said in a Nov. 18 Truth Social post. “If we don’t, then China will easily catch us in the AI race. Put it in the NDAA [National Defense Authorization Act], or pass a separate Bill, and nobody will ever be able to compete with America.”

A Trump administration AI action plan released in July called for steps such as removing "bureaucratic red tape" at both the federal and state levels that could stifle the nascent market.

Faced with a growing backlash, the White House has put on hold a draft executive order aimed at preempting state AI statutes through lawsuits and by withholding federal funds, according to a Reuters report this month.

During the final stages of the so-called Big Beautiful Bill Act’s passage in July, the Senate stripped a provision that would have imposed a moratorium on state AI regulation for 10 years. That action followed a failed effort by Senate Commerce Chairman Ted Cruz, R-Texas, to advance compromise language.

The renewed push to preempt state AI laws has encountered bipartisan opposition across states in recent weeks, including from high-profile Republicans such as Florida Gov. Ron DeSantis and Arkansas Gov. Sarah Huckabee Sanders. GOP opponents on Capitol Hill include Sen. Josh Hawley (Mo.) and Rep. Marjorie Taylor Greene (Ga.).

“Stripping states of jurisdiction to regulate AI is a subsidy to Big Tech and will prevent states from protecting against online censorship of political speech, predatory applications that target children, violations of intellectual property rights and data center intrusions on power/water resources,” DeSantis said in a Nov. 18 post on X.

More than two dozen states have enacted over 70 new AI laws so far this year, according to a review by the Transparency Coalition, a non-profit group that favors AI regulation. Deepfakes and chatbot safety have emerged as the most pressing issues on the AI regulatory front in 2025, the coalition said. A number of states have also addressed the use of AI in areas such as healthcare, insurance and law enforcement, it said.

In the absence of federal preemption, each state could plausibly pass an average of two to three laws targeting AI “every year for the foreseeable future,” Wagener said in his post. This could result in conflicting laws that cause the market to become “so fragmented that AI deployment, adoption, and innovation slow to a crawl,” he said.