US House Considers 10-Year Moratorium on State AI Regulations to Foster Innovation

The US House of Representatives is currently considering a significant legislative proposal that would impose a 10-year moratorium on state-level regulations governing artificial intelligence (AI) technologies. This amendment, under review by the House Energy and Commerce Committee, aims to prevent states and local governments from enforcing any laws or regulations specifically targeting AI models, systems, or automated decision-making processes during this period.

Proponents of the bill argue that a unified federal standard is essential to avoid a patchwork of conflicting state regulations that could hinder the rapid growth and deployment of AI technologies. Since the explosive rise of generative AI tools like ChatGPT in late 2022, companies have aggressively integrated AI across various sectors, making regulatory clarity critical for sustained innovation and competitiveness, especially in the global race against China.

However, this moratorium raises concerns about consumer protections. Critics emphasize that AI technologies pose significant risks related to privacy, transparency, discrimination, and accountability. States like California and Colorado have already enacted AI-specific laws addressing these issues, and a federal ban on state regulations could delay important safeguards. Consumer advocates warn that without state-level oversight, harmful consequences such as increased fraud, bias, and surveillance could proliferate.

The proposed legislation does allow exceptions for laws that facilitate AI development or apply equally to AI and non-AI systems performing similar functions. Yet, it would override existing state regulations, potentially nullifying consumer protections already in place. This has sparked debate about the appropriate balance between fostering innovation and ensuring public safety.

Industry leaders, including OpenAI CEO Sam Altman, have expressed concerns about overly stringent regulations, advocating for industry-developed standards rather than EU-style regulatory frameworks. Meanwhile, lawmakers recognize the urgency to establish clear federal guidelines before states advance their own diverse regulatory agendas, which currently include over 550 AI-related legislative proposals introduced in 2025 alone.

Legal experts caution that a moratorium could shift many consumer protection issues into the courts or state attorneys general offices, relying on existing laws not specifically designed for AI. This could lead to prolonged litigation and uncertainty. Some scholars suggest that broader state-level regulations addressing privacy and transparency could still be viable without targeting AI directly, but this approach may also face legal challenges.

Ultimately, the debate highlights the complex challenge of balancing innovation with responsible governance. While a federal moratorium could streamline AI development and enhance US competitiveness, it also risks sidelining vital consumer protections. Policymakers, industry stakeholders, and consumer advocates continue to seek a balanced framework that supports technological advancement while safeguarding public interests.