The Biden Administration has taken aim at the growing complexity of state-by-state artificial intelligence (AI) regulations, which it deems a significant impediment to innovation in the AI sector. An executive order (EO) issued recently highlights concerns over compliance burdens, mandates for ideological bias in AI technologies, and state laws that extend their regulatory reach beyond their own borders. This move follows California’s introduction of the Transparency in Frontier Artificial Intelligence Act, signaling urgency within federal ranks to establish a cohesive national policy.
Legally, executive orders do not create binding law or override state statutes. Instead, their primary function is to guide federal agencies. Under the Supremacy Clause of the U.S. Constitution, preemption of state laws is typically a prerogative of Congress or valid agency actions. This EO suggests that the Biden Administration intends to leverage legal avenues and agency policymaking to challenge existing state AI regulations. A clear expectation is set forth: Congress must enact federal-level AI legislation for any state-level regulations to be effectively preempted.
The EO outlines several key initiatives aimed at addressing the regulatory landscape. First, it mandates the establishment of an AI Litigation Task Force within 30 days, directed by the Attorney General. This Task Force will challenge state AI laws that conflict with federal policy, particularly on grounds of unconstitutional regulation of interstate commerce.
In addition, the Secretary of Commerce is tasked with evaluating existing state AI laws within a 90-day period. This evaluation will identify laws that contradict national policy and recommend legal challenges through the Task Force. It may also spotlight state regulations that encourage AI innovation aligned with federal objectives.
The EO proposes a restriction on federal funding for states that enact burdensome AI regulations identified in the Secretary’s evaluation. These states may lose eligibility for federal funding under programs such as the Broadband Equity Access and Deployment (BEAD) Program unless they agree to suspend the enforcement of such laws during the funding period.
Meanwhile, the Federal Communications Commission (FCC) chairman is instructed to consider implementing a federal standard for reporting and disclosure of AI models, which would supersede conflicting state requirements. The EO also tasks the Federal Trade Commission (FTC) with issuing a policy statement regarding the preemption of state laws that mandate deceptive AI practices, clarifying when these laws conflict with the FTC Act’s prohibitions on unfair or deceptive acts or practices.
Furthermore, the EO calls for legislative recommendations aimed at developing a uniform federal AI policy framework. This framework would seek to preempt conflicting state laws while allowing exceptions for areas such as child safety and state procurement.
This executive order signals a vigorous federal initiative to harmonize AI regulations, emphasizing the need for a unified approach amidst a fragmented state-level landscape. While the EO itself lacks the authority to create binding law, it marks a significant escalation in federal efforts to standardize AI policy across the country.
One noteworthy area for industry stakeholders is how the FTC will interpret the Federal Trade Commission Act regarding existing state laws that regulate algorithmic bias. As developments unfold, industry participants are advised to closely monitor the recommendations and policies arising from this EO. In fact, some states are reportedly examining the legislation of leading states, such as California, to potentially mirror it in their own laws, recognizing the benefits of a nationally harmonized regulatory approach to AI.
As the Biden Administration pushes forward with its ambitious agenda, the implications for both U.S. and global AI policy will be significant. The upcoming legal challenges, agency actions, and legislative proposals will likely shape the future landscape of AI regulation, creating a more predictable environment for innovation.
White House | Federal Communications Commission | Federal Trade Commission | Nvidia | OpenAI
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