Lawmaker urges federal-first approach to AI rules to prevent patchwork state laws

Rep. Jay Obernolte told policy and industry audiences that a proposed 10-year statewide moratorium on AI regulation was intended primarily as a bargaining chip to catalyze federal legislation, not to lock states out indefinitely. He recommended Congress pursue a risk-targeted, sector-by-sector federal framework that specifies where federal guardrails are necessary and where states retain authority, arguing that preemption clauses should be drafted alongside enumerated state lanes. Obernolte said the moratorium’s legislative path created confusion about its purpose after it moved through committees and the House, and he emphasized that the goal was to create momentum for a national statute rather than to halt state policymaking forever. He welcomed the White House’s subsequent executive order, noting it reflected a narrow, coordinated approach that exempted established state responsibilities — including protections for minors, data and compute infrastructure, and procurement rules. Behind the scenes, senior administration deliberations exposed a high-stakes trade-off between quickly delivering an industry-friendly national posture and preserving room for state experimentation; a compromise inside the vice president’s office produced a tightened executive order with specific carve-outs. The episode also accelerated political mobilization: technology investors and corporate donors have channeled substantial resources into PACs and committees to influence forthcoming legislative and regulatory design, building on roughly $125 million reported in 2025 to date. Industry stakeholders pressing for uniform national rules argue federal coordination reduces compliance costs and prevents a patchwork of conflicting state laws, while state officials and more populist conservatives warn that broad preemption would undermine local innovation, privacy and child-safety protections. For companies, a federal-first statute that still leaves defined state lanes could simplify interstate compliance but also concentrate stakes in federal tests of preemption and statutory scope. Obernolte’s sector-specific prescription accepts that AI risks vary by use, implying targeted obligations for high-risk applications rather than one-size-fits-all bans. Legal challenges seem likely if Congress attempts wide-ranging exclusions of state authority, and the White House move — while clarifying some immediate uncertainty — converted the policy dispute into a prolonged political and judicial contest. Governors, municipal CIOs and procurement officers continue to fret over overlapping rules and enforcement burdens, and technologists are increasingly calling for practical mitigations like portability, verifiable logging and shared public compute pools. The net effect has been to shift the debate from a dramatic moratorium proposal toward a messy, high-stakes negotiation over how to balance national uniformity, state experimentation and industry competitiveness.