The Bipartisan State Hatred of Trump's AI Preemption Push

PLUS: The feds back off a rent price-fixing case.

Photo credit: Gary Cooper

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Last week, a bipartisan group of 14 Texas state senators sent a letter to their federal senators — Republicans Ted Cruz and John Cornyn — asking them to oppose any federal effort to preempt state regulation of artificial intelligence.

“In the spirit of federalism, protecting Texans from potential harms due to Al, and giving states the flexibility we need to design policies to deal with the imminent Al revolution, we ask you not to undo the important work Texas has already done on this issue,” they wrote. “Let the states lead when it comes to striking the balance between protecting our citizens from potential harms due to Al while ensuring that America leads on Al development.”

Their concern is very warranted: There has been a concerted push in Congress and the White House to preempt — i.e., eliminate — state laws governing AI use and abuse, leaving the federal government and the swarm of tech lobbyists who encompass it as the sole arbiter of AI policy. The bipartisan state-based pushback has been an important and encouraging sign that, for the moment, AI won’t be allowed to turn into a total and complete Wild West.

Readers may remember several months ago some members of Congress made a move to preempt state AI laws, but it went down in flames after significant pushback; a House-passed budget measure was defeated by a 99-1 vote in the Senate. But that hasn’t cowed preemption supporters, who have reportedly contemplated attaching a state AI-law moratorium to a future must-pass piece of legislation. (The annual National Defense Authorization Act was proposed as a possible legislative vehicle, but it seems that won’t be happening, at least as of right now.)

The Trump administration has also mused about issuing an executive order that would, in theory, have the same effect, linking the elimination of state AI regulations to access to certain pools of federal funding, essentially bribing states to do the bidding of big tech and its usual tired excuses for desiring deregulation.

The bipartisan pushback to AI-preemption from state politicians has been significant. In addition to the Texas letter I highlighted above, nearly 300 state legislators from 43 states signed a joint missive to Congress last week calling on it to abandon the idea (after a similar number joined a similar letter during the earlier preemption push). State attorneys general from both parties are also broadly opposed.

“These attempts undermine the democratic process and disregard the extensive bipartisan work already underway in state legislatures,” said Illinois State Rep. Marcus Evans Jr. and Montana Sen. Barry Usher, president and president-elect of the National Conference of State Legislatures, respectively.

Obviously, a large part of this positioning is state politicians protecting their turf. Preemption takes away their power and eliminates a whole swath of activity they could engage in — and therefore the ability to build political capital off of being seen as addressing a pressing problem.

But opponents of preemption are also correctly reading the political moment and the legitimate fears their constituents have of AI running amok. Fewer than one in five Americans support federal AI preemption, according to a recent poll, while nearly 60 percent are opposed, which is broadly in line with other polling regarding AI rules and regulations, and the concerns voters feel about the effect AI will have on their lives.

So why the continued preemption push from a cohort of federal lawmakers? Well, I think it’s that spending on AI by a few dominant corporations is driving the stock market and a hefty chunk of GDP — even outpacing consumer spending in the first half of this year — and the administration and certain Republicans in Congress don’t want to do anything that might pop the bubble on their watch. They’re committed to juicing stock numbers, even if the increase is mostly based on seven tech companies passing money back and forth on AI-related initiatives and building more data centers than they’re ever going to need.

As The New York Times put it, “Everything tied to artificial intelligence is booming. Just about everything else is not.” State-level intervention threatens to slow or even roll back the wild ride tech stocks are on, and then the lack of oomph in “everything else” will become more noticeable.

Of course, there’s very little evidence right now that all this AI spending will result in much useful stuff for the general populace, and we are talking about a technology that the most ardent boosters claim will eliminate a swathe of jobs, and that has been shown to seriously threaten the safety of children, facilitate scams, and generally usher in an era of fraud and theft that could dwarf anything we’ve experienced before.

State lawmakers, who are closer to their constituents and, in my experience, generally more responsive to emerging threats and problems, want to tackle those harms now, not whenever someone in Congress decides the stock market juice is no longer worth the squeeze or after we’re all sitting amid the wreckage of an AI-bubble induced crisis.

To be clear, state preemption of AI laws and regulations would potentially eliminate an already existing set of rules requiring, among other things: the disclosure of the use of AI in health care and financial decisions; state and city ordinances that prevent landlords from using algorithms to collude on rental prices; laws that protect against AI discrimination in the job application process; laws that bar the use of AI altered images and videos in elections; and laws aimed at protecting children from truly dystopian AI situations; and much more.

That’s what these state lawmakers have been, so far, successfully protecting, and we should all hope they continue to win this particular battle.

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UPDATE: Last week, the Department of Justice settled its case against RealPage regarding allegations that the corporation’s algorithmic pricing tools enabled corporate landlords to collude to raise the price of rental housing. (You can read background on this issue here and here.) The settlement is incredibly weak, and was not joined by the states that are also suing RealPage. Several states did propose a settlement, though, with Greystar, one of the corporate landlords that allegedly engaged in algorithmic collusion via these systems.

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SHAMELESS SELF-PROMOTION: I went on the Incorruptible Mass podcast to discuss state antitrust reform (and more!). You can give it a listen here.

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SIMPLY STATED: Here are links to a few stories that caught my eye this week.

• Tesla has reportedly provided insufficient evidence that it is holding up its end of a tax credit deal with Travis County, Texas.

• Ohio lawmakers attached a provision to the state budget that would ensure college athlete “name, image, and likeness” deals expire when a student graduates.

• Starbucks will pay $38 million to settle allegations that it broke New York City’s fair work scheduling laws.

• Georgia’s lieutenant governor is backing a large data center project where many of the details — including its power usage — remain unknown.

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— Pat Garofalo