Blue States Plot to Defeat Trump's AI Policy Vision
Will Congress Let Gavin Newsom and Zohran Mamdani Control American AI Policy?
By Kevin Frazier & Adam Thierer
President Trump returned to the White House in January with a vision for accelerating artificial intelligence (AI) and a plan for ensuring the United States leads the world in algorithmic innovation. Unfortunately, several large blue states are now pushing costly regulations that will derail this technological revolution, hobbling the nation’s effort to advance life-enriching innovations and lead global AI development.
State legislators in California, Colorado, Illinois, and New York seem to think that their concerns about AI entitle them to impose their will on the rest of the country. These four states alone account for almost a quarter of the over 1,000 AI-related bills currently being considered across the nation. California Governor Gavin Newsom has made it a habit of signing AI bills that explicitly aim to have nationwide effects. Legislators in New York have explained their rush to regulate AI as something the national interest requires. Other states are poised to follow their lead.
American innovation and opportunity will suffer if this proliferating patchwork of parochial regulations isn’t stopped. Upon taking office, Trump dismantled the Biden administration’s fear-based blueprint for AI and later replaced it with a new “AI Action Plan” rooted in “a dynamic, ‘try-first’ culture for AI across American industry.” “We’ve got to let the private sector cook [to] out-innovate the competition,” Trump’s AI czar David Sacks argued.
Trump’s vision is off to a roaring start, with the private sector delivering hundreds of billions in investment in advanced AI infrastructure, generating a “massive, private-sector-led stimulus” for the economy accounting for an estimated 92% of GDP growth over the first half of this year.
Unfortunately, blue state lawmakers are ready to put an end to it. They prefer to push the old Biden regulatory vision that Trump discarded. Last year, Colorado passed a historic AI bill that would expand disparate impact theories and essentially require the equivalent of a DEI oversight layer be added to all algorithmic systems. Although he signed the law, Gov. Jared Polis admitted it would “create a complex compliance regime for all developers and deployers of AI” through “significant, affirmative reporting requirements.” An independent analysis of the measure forecasts over 30,000 lost jobs and $5.5 billion of forgone economic output in the tech sector alone.
Meanwhile, California and Illinois recently passed new regulations on the use of AI in pricing policies, employment practices, chatbots, and much more. Many other states, and even big blue cities, are getting in on the act. New York City has already passed major regulation of AI hiring software.
Tech innovators are looking at a future in which Newsom and NYC mayor-elect Zohran Mamdani gum up national AI markets with technocratic compliance mandates, while their emboldened trial lawyer allies launch endless frivolous claims based on the expansive theories of “algorithmic harm.” An entirely new cottage industry of “AI auditors” is already emerging to administer the system. “Little Tech” innovators won’t survive this paperwork hell. Consider that for the average startup a simple change to a privacy policy may require upwards of $6,000 in legal fees.
All these regulations are unnecessary. Every state already has numerous laws and regulations to address algorithmic practices that violate consumer protections or civil rights. What’s more, this regulation entails significant opportunity costs. Democrats keen to turn AI into a boogeyman are enacting laws that will actively hinder the long-term well-being of the people they claim to support. By fighting AI adoption in schools, in the workplace, and across society, they risk freezing communities and, if they have their way, the whole country, in the equivalent of a technological Stone Age. AI is here. It’s not going anywhere. Our future involves harnessing it, not trying to wish it away.
The Trump administration has done its job and now Congress must do theirs. A federal effort to impose a moratorium on excessive parochial controls failed this summer, but a preemptive national standard is essential to stopping the onslaught of confusing, contradictory state and local mandates. Absent federal action, “big blues” will impose their will on the rest of the nation. Now is the time for Congress to protect the interstate marketplace and ensure America’s long-term competitiveness.
Kevin Frazier is the AI innovation and law fellow in the University of Texas School of Law. Adam Thierer is a senior fellow for technology and innovation at the R Street Institute.
Additional Reading from Kevin Frazier & Adam Thierer on AI preemption:
Frazier, Kevin, Testimony before the The House Judiciary Subcommittee on Courts, Intellectual Property, Artificial Intelligence, and the Internet, Hearing on “AI at a Crossroads: A Nationwide Strategy or Californication?” Sept. 18, 2025.
Thierer, Adam, Testimony before the The House Judiciary Subcommittee on Courts, Intellectual Property, Artificial Intelligence, and the Internet, Hearing on “AI at a Crossroads: A Nationwide Strategy or Californication?” Sept. 18, 2025.
Frazier, Kevin & Adam Thierer, “No Single State Should Dictate National AI Policy,” Governing, Aug. 28, 2028.
Frazier, Kevin & Adam Thierer, “1,000 AI Bills: Time for Congress to Get Serious About Preemption,” Lawfare, May 9, 2025.
Frazier, Kevin, “Extraterritorial Limits on States as Laboratories of AI Policy,” The Regulatory Review, Aug. 25, 2025.
Frazier, Kevin, “Federalist Solutions to AI Regulation,” Law & Liberty, Apr. 7, 2025.
Thierer, Adam, “Don’t Let Blue States Control Our AI Future,” City Journal, July 25, 2025.
Thierer, Adam, “The AI Regulatory Moratorium and the Proper Understanding of American Federalism,” Medium, June 28, 2025.
Thierer, Adam, “Comments of R Street Institute on a Learning Period Moratorium for AI Regulation in Response to Request for Information (RFI) Exploring a Data Privacy and Security Framework,” R Street Institute Regulatory Comments, Apr. 3, 2025.
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