States Lead the Charge in AI Regulation as Federal Government Lags Behind

State-Led AI Regulation Gains Momentum

In the absence of comprehensive federal regulation, U.S. states are taking the lead in establishing guardrails around artificial intelligence (AI) technologies. The defeat of a proposed moratorium on state-level AI regulation in Congress has paved the way for states to continue their legislative efforts 1

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. As of 2025, all 50 states have introduced various AI-related bills, with several already enacting legislation 1

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Key Areas of State AI Regulation

State legislatures are focusing on four primary aspects of AI regulation:

1. Government Use of AI: States are introducing bills to oversee the public sector's use of AI, particularly in predictive AI applications. These bills emphasize transparency, consumer protections, and risk assessment 1

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   . For instance, the Colorado Artificial Intelligence Act mandates transparency and disclosure requirements for AI systems involved in consequential decisions 1

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2. AI in Healthcare: In the first half of 2025, 34 states introduced over 250 AI-related health bills 1

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   . These bills address four main categories:
   • Disclosure requirements
   • Consumer protection
   • Insurers' use of AI
   • Clinicians' use of AI

3. Facial Recognition and Surveillance: By the end of 2024, 15 states had enacted laws to limit potential harms from facial recognition technology 1

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   . These regulations often require vendors to publish bias test reports and data management practices, and mandate human review in the use of these technologies 1

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4. Generative AI and Foundation Models: States are addressing concerns related to generative AI and foundation models. Utah's Artificial Intelligence Policy Act requires disclosure of AI use in certain interactions 1

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   . California's AB 2013 mandates that developers post information about the data used to train their AI systems, including foundation models 1

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Implications and Challenges

While state-led regulation provides needed oversight on privacy, civil rights, and consumer protections, it also creates a patchwork of laws that may complicate compliance efforts for AI developers 1

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. However, many experts believe that states can play a crucial role in addressing the regulatory gap left by the federal government 1

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Federal Response

The Trump administration announced its AI Action Plan on July 23, 2025, which includes a controversial stance on state-level AI regulation. The plan states, "The Federal government should not allow AI-related Federal funding to be directed toward states with burdensome AI regulations" 1

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. This approach may create tension between federal and state-level AI governance efforts.

As AI technologies continue to evolve and permeate various sectors, the interplay between state and federal regulation will likely remain a critical issue in shaping the future of AI governance in the United States.