States Defy Washington, Tech Lobby as Voter Backlash Fuels AI Regulation

New regulations for artificial intelligence (AI) are gaining momentum in states as public anxiety and election-year pressures empower lawmakers to implement restrictions, Politico reported on September 2, 2025. This shift reflects a reversal from late 2025 when federal preemption threats and the threat of heavy political challenges froze state action.

Utah Rep. Doug Fiefia, who abandoned an AI and children's safety bill, plans to revive it after overcoming opposition from the tech-funded political network Leading the Future. Public concerns, spanning party lines, encompass AI's impact on children, employment, privacy, as well as the environmental and economic implications of AI data centers.

The trend emerged as negative polling and increased support for regulation prompted lawmakers to embrace the issue. Massachusetts lawmakers are considering an AI safety bill that may surpass existing laws in Illinois, California, and New York. Rhode Island already enacted safeguards for chatbots, while California is advancing measures on audits, chatbots, and privacy.

In Utah and South Carolina, lawmakers are reviving efforts to protect children online. Maryland Sen. Katie Fry Hester, whose previous bills on high-risk AI and chatbot companions faced industry resistance, anticipates a better reception for her children's chatbot proposal. President Donald Trump's December executive order aimed at preventing states from implementing AI restrictions initially deterred legislative action, but the Department of Justice has not pursued the threatened challenges, leading lawmakers to believe the order is ineffective.

Rising opposition to data centers, crucial for powering advanced AI models, is now pressuring even governors who were previously aligned with industry interests, including Pennsylvania Gov. Josh Shapiro and Texas Gov. Greg Abbott. Advocacy groups pushing for stricter regulations have obtained sufficient funding to maintain a consistent presence in statehouses, some of which receive backing from companies like Anthropic.

Industry critics argue that Anthropic's proposals could disadvantage competitors, while the company asserts its regulations target large companies earning over $500 million annually and would not burden startups. Technology lobbyists are now focusing on achieving greater consistency among state laws rather than preventing state regulation.

They recognize that conflicting requirements could harm smaller companies. OpenAI's "reverse federalism" strategy aims to align states around a unified safety standard, acknowledging the political reality that state AI laws are becoming unavoidable.