On July 23, the Trump Administration released its long-awaited AI Action Plan. Short of copyright exemptions for model training, the administration appears ready to give OpenAI, Anthropic, Google and other major players nearly everything they asked of the White House during public consultation. However, according to Travis Hall, the director of state engagement at the Center for Democracy and Technology, Trump’s policy vision would put states, and tech companies themselves, in a position of “extraordinary regulatory uncertainty.”
It starts with Trump’s attempt to prevent states from regulating AI systems. In the original draft of his recently passed tax megabill, the president included an amendment that would have imposed a 10-year moratorium on any state-level AI regulation. Eventually, that clause was removed from the legislation in a decisive 99-1 vote by the Senate.
It appears Trump didn’t get the message. In his Action Plan, the president signals he will order federal agencies to only award “AI-related” funding to states without “burdensome” AI regulations.
“It is not really clear which discretionary funds will be deemed to be ‘AI-related’, and it’s also not clear which current state laws — and which future proposals — will be deemed ‘burdensome’ or as ‘hinder[ing] the effectiveness’ of federal funds. This leaves state legislators, governors, and other state-level leaders in a tight spot,” said Grace Gedye, policy analyst for Consumer Reports. “It is extremely vague, and I think that is by design,” adds Hall.
The issue with the proposal is nearly any discretionary funding could be deemed AI-related. Hall suggests a scenario where a law like the Colorado Artificial Intelligence Act (CAIA), which is designed to protect people against algorithmic discrimination, could be seen as hindering funding meant to provide schools with technology enrichment because they plan to teach their students about AI.
The potential for a “generous” reading of “AI-related” is far-reaching. Everything from broadband to highway infrastructure funding could be put at risk because machine learning technologies have begun to touch every part of modern life.
On its own, that would be bad enough, but the president also wants the Federal Communications Commission (FCC) to evaluate whether state AI regulations interfere with its “ability to carry out its obligations and authorities under the Communications Act of 1934.” If Trump were to somehow enact this part of this plan, it…