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The U.S. Senate’s recent decision to remove a 10-year ban on state-level AI regulation from President Trump’s expansive tax-cut and spending bill represents a victory for employers, one expert says, but is causing concerns about “regulatory fragmentation” for some tech firms.
“This is a win for employers only insofar as it reduces the uncertainty—or turmoil—that the moratorium would’ve created,” says Niloy Ray, a shareholder at Littler and a core member of the firm’s AI and Technology Practice Group.
However, allowing states to move forward with their own regulations raises flags about a patchwork of AI laws, according to INCOMPAS, a trade group representing tech and communications companies, including Google, Meta and Microsoft.
The group, which advocates for competition-friendly policies, issued a statement opposing a ban on state regulation ahead of the Senate decision.
“With over 1,000 AI-related bills nationwide, a pause is needed to avoid regulatory fragmentation that could harm U.S. AI leadership,” the statement reads. “This isn’t California’s race against China—or New York’s or Colorado’s. It’s America’s race, and it demands a unified national strategy.”
Reduced uncertainty around federal AI regulation Niloy Ray, Littler
The ban would have been more problematic than allowing the states to develop AI regulation frameworks,
