America’s AI Future Can’t Survive 50 Sets of Rules

"State legislatures across the country are rushing to regulate AI, but in doing so, they’re threatening to turn the information superhighway into a pothole-ridden back road."

(Washington, DC) - The following is the National Artificial Intelligence Association's statement on the removal of the AI moratorium clause from the "Big Beautiful Bill":

"Artificial Intelligence is driving America’s next wave of innovation unless our lawmakers succeed in throwing it off course. State legislatures across the country are rushing to regulate AI, but in doing so, they’re threatening to turn the information superhighway into a pothole-ridden back road.

Imagine if Google Search worked differently in every state, your health app’s AI doctor vanished at the border, or tech startups needed a lawyer before they could write a line of code. That’s not progress; that’s paralysis.

Across the nation, states are passing AI laws at record speed. The intent is good—Americans deserve protection from algorithmic bias and abuse. But this rapid patchwork of laws is creating a mess of contradictions and duplications. Consider these real examples:

• Facial recognition in law enforcement is banned in Massachusetts, Illinois, and Washington yet in other states, police AI is green-lit.

• Student AI surveillance is banned as a privacy risk in California, but mandatory in Texas.

• AI hiring disclosures require employers to send multiple versions of nearly identical notices to job seekers in New York, Maryland, and Illinois.

This is “death by a thousand lawsuits” not just for Silicon Valley, but for every American business trying to use AI to compete.

The economic costs are staggering. Legal and compliance costs alone could exceed billions per year for the AI industry, according to Bain & Company. Startups will be buried in red tape; even giants like Google and OpenAI will be forced to spend more on lawyers and engineers than on building better AI.

Product rollouts will slow. National launches could take a year longer as companies struggle to comply with 50 conflicting sets of rules. Many won’t bother at all. Consumers and businesses in restrictive states may pay higher prices or lose access to AI tools altogether.

But the greatest danger is not to the tech giants. It’s to America’s leadership in the global AI race. While we’re tangled up in our own red tape, China and the European Union are moving forward with unified, predictable regulatory frameworks. The U.S. risks losing billions of dollars per year in global AI investment, and we could see our share of future economic growth shrink by hundreds of billions. The societal impacts of being a follower instead of the leader in this race are incalculable.

Proponents of state-level regulation argue it will keep people safer, but history tells a different story. Regulatory patchwork always creates cracks for bad actors to exploit. Risky practices won’t disappear they’ll simply move to states with weaker rules, leaving millions of Americans exposed.

What’s the solution? Congress must act setting clear, strong national guardrails for AI while preempting contradictory state rules. Protect Americans, but don’t strangle innovation. One green light is better than 50 stop signs.

Letting every state write its own AI rules is like asking every city to invent its own traffic signs nobody gets anywhere fast. Innovation thrives on clarity, not confusion.

The future of American AI shouldn’t be a patchwork quilt. It should be a flag, one nation, leading the world, together."

Respectfully,

Aaron Golbin, Co-Chair

Caleb Max, Co-Chair

National Artificial Intelligence Association (NAIA)

 www.theNAIA.org

Sources: Bain & Company, Stanford AI Index, Brookings Institution, NCSL, National Bureau of Economic Research, Center for American Entrepreneurship.