AI laws could stifle innovation, but broad preemption would be ‘reckless,’ experts tell House subcommittee

Like Frazier, Adam Thierer, a senior technology and innovation fellow at the conservative Washington think tank R Street Institute, also testified on the need for a coordinated, national approach to AI regulation.

Thierer said state regulations could hinder innovation, create compliance challenges for companies of all sizes and disproportionately burden small businesses. He said federal lawmakers can avoid this by looking to laws that have successfully preempted state regulations, such as the Internet Tax Freedom Act, a 1998 law that prohibited states from implementing new taxes on internet access or e-commerce transactions for a three-year period, while also, he claimed, giving rise to digital innovation.

“Now is the time for Congress to work the same magic for AI by creating a national framework to prevent a patchwork of state mandates from undermining AI innovation,” Thierer said, noting several comments made by governors recently, and expressing frustration about the myriad AI laws.

“Congress could again try to implement a moratorium, or it could formally preempt specific state and local regulatory enactments that impose an undue burden on interstate algorithmic commerce,” Thierer said. “If Congress chooses the latter option, federal lawmakers should first preempt state regulations of AI frontier models, because the costs associated with such regulations would outweigh any local benefits. Such rules would create spillovers, and undermine development of the system the nation needs to compete globally.”