Trump orders to stop state-level AI regulation
Federal Push to Halt State AI Regulations
As artificial intelligence reshapes industries from healthcare to hiring, states have accelerated regulatory efforts in recent months, introducing bills that mandate transparency, risk assessments, and consumer protections. A draft federal executive order, leaked on November 19, 2025, signals a direct challenge to these initiatives, directing agencies to identify and litigate against state laws deemed burdensome.
This move, paused as of November 21, reflects ongoing tensions in a landscape where 45 states considered AI-related legislation in 2025, per the National Conference of State Legislatures (NCSL) tracker. With federal guidance fragmented, lacking comprehensive national rules—states fill the void, but the proposed order could preempt them through lawsuits and funding threats, reshaping compliance for the $200 billion U.S. AI market projected for 2026.
States Leading the Charge: Recent Bills and Their Aims
In October and November 2025, state lawmakers advanced measures targeting AI's societal risks, focusing on bias mitigation, deepfake disclosures, and algorithmic accountability. California's Senate Bill 53, progressing through committee on October 15, requires high-risk AI systems in employment and lending to undergo annual audits for discrimination, with fines up to $10,000 per violation. New York's RAISE Act, reintroduced October 22, compels developers of generative AI models to publish safety protocols and report incidents causing harm, aiming to curb misuse in elections and media.
Illinois's House Bill 5461, cleared October 28, mandates watermarking for AI-generated content to combat deepfakes, building on its 2023 biometric privacy law that has yielded $1.2 billion in settlements since 2015. These bills emphasize developer responsibility: Audits must document bias testing, with public reports due annually, potentially affecting 60 percent of U.S. AI deployments in regulated sectors like finance and healthcare.
New York's RAISE Act: Disclosure Mandates Under Fire
New York's RAISE Act exemplifies state-level scrutiny, requiring large AI firms to disclose training data sources and risk mitigation steps for models over 1 billion parameters. Introduced October 22, 2025, it faced immediate pushback, with a super PAC linked to tech interests spending $500,000 on ads by November 10 opposing its "innovation-killing" clauses. Proponents cite a 2025 Brookings Institution study showing undisclosed AI biases cost U.S. businesses $100 billion yearly in errors, from hiring disparities to faulty loan approvals.
The bill's mechanism: Mandatory incident reporting within 72 hours for harms exceeding $50,000, with AG enforcement powers including civil penalties up to $5,000 per violation. As of November 24, it awaits assembly review, amid 15 similar disclosure bills in other states.
Broader State Efforts: Moratoriums, Audits, and Deepfake Bans
Beyond disclosures, states target specific harms. Colorado's AI Act, effective February 2026 but under federal scrutiny since October 30, requires impact assessments for high-risk AI in 15 sectors, with 2025 pilot audits uncovering 28 percent bias rates in public tools. Texas's Senate Bill 20, advanced November 5, bans deepfakes in elections 30 days prior to voting, with $1,000 fines per offense, addressing a 2025 rise in 200+ AI-generated attack ads nationwide.
A November 17 House defense bill provision proposed a 10-year moratorium on state AI enforcement, but the Senate struck it on November 20 with near-unanimous support (98-2 vote), preserving state authority. Overall, 9.5 percent of 2025 AI bills passed, per Future of Privacy Forum data, focusing on audits (40 percent) and disclosures (35 percent).
Federal Leverage AI laws' constitutionality, prioritizing those "burdening interstate commerce."
This means developers face dual compliance: State audits now, potential federal overrides later. A 2025 IAPP survey shows 62 percent of firms already budgeting 15 percent more for multi-jurisdictional reviews.
States' focus on audits and disclosures could slow AI deployment by 20 percent in regulated sectors, per McKinsey 2025 estimates, but also foster trust—65 percent of consumers favor such transparency, per Pew November polls. The federal pause buys time, but 40 states eyeing 2026 sessions signal escalation; Colorado's law alone prompted 25 compliance filings in Q4 2025.




