Calling for Federal Preemption of State AI Regulation - Articles

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Calling for Federal Preemption of State AI Regulation

Calling for Federal Preemption of State AI Regulation

The Insights Association, the leading nonprofit organization representing the U.S. market research, insights and analytics industry, joined with more than 40 organizations in calling for temporary federal preemption of artificial intelligence regulation at the state level.

The January 28, 2026 letter urged “a targeted federal approach” from Congress “that temporarily preempts certain state laws and regulations specific to artificial intelligence (AI). Federal preemption is a sensible and well-established legal tool that Congress has used across sectors to ensure a single, predictable standard for critical economic activity while a durable national framework is developed.

The preemption would be a temporary measure to give Congress time to “craft a thoughtful, balanced national framework,” providing “regulatory clarity and consistency.”

Temporary federal preemption is important, according to the letter, “because the United States is facing growing regulatory fragmentation" as states "have introduced hundreds of AI-related bills in an effort to respond quickly to a rapidly evolving technology. In the absence of federal coordination, a small number of states risk effectively setting de facto national standards, despite the fact that AI systems operate across state borders and throughout interstate commerce. This dynamic undermines democratic accountability and places the United States at a disadvantage relative to global competitors."

In contravention of a lot of states’ actions, President Trump signed an executive order in December aiming to preempt state AI laws and regulations on multiple fronts that may impact the insights industry in the U.S. (and Senate legislation was introduced to try to contravene his order.) IA members can review much of the state activity in our 2025 AI legislative wrap-up.

A state AI regulatory patchwork “raises compliance costs, which are ultimately passed on to consumers in the form of higher prices and fewer choices. Uniform federal standards help lower these costs by providing clarity and predictability, enabling companies to invest more in innovation, efficiency, and responsible deployment rather than duplicative legal compliance. This issue is especially acute for startups and small businesses. State-level AI regulations are often broad, vague, and inconsistent across jurisdictions. While large firms may be able to absorb these costs, smaller companies and new market entrants cannot. The result is higher barriers to entry, reduced competition, and fewer innovative challengers, precisely the opposite of what policymakers should want in a rapidly evolving and strategically important sector.”

The letter concluded that, “A time-limited preemption ensures that federal leadership is established without foreclosing future policymaking or locking in a permanent regulatory outcome before the technology and its uses are fully understood. This coalition welcomes and encourages congressional action that will ensure the U.S. remains on the vanguard of AI development.

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