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Proposed Federal Moratorium on AI Regulation Threatens to Override New York and California Laws

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Published on May 15, 2025
Proposed Federal Moratorium on AI Regulation Threatens to Override New York and California LawsSource: Unsplash/ Igor Omilaev

Proposed federal legislature could potentially halt New York State's progress in regulating artificial intelligence technologies. This comes as Republicans in Congress aim to impose a ten-year moratorium on states from enforcing laws that address AI usage. The planned freeze, tacked onto a recent budget reconciliation bill, seeks to prevent states from intervening in matters of AI governance.

As reported by Gothamist, New York had enacted regulations aimed at addressing issues such as sexually explicit deep fakes of minors and AI chatbots affecting mental health of their users. Rep. Alexandria Ocasio-Cortez, who served on the House Task Force on Artificial Intelligence, expressed concerns that these protections, including legislation requiring chatbots to detect and refer expressions of self-harm to support networks, would be rendered ineffective if the moratorium were approved. "That would be wiped out," Ocasio-Cortez said in a markup of the bill.

Meanwhile, The Guardian outlines a broader picture, where states like California and New York, which have enacted various AI regulations, would see such laws potentially become unenforceable. Critics, including Lee Hepner, senior legal counsel at the American Economic Liberties Project, has described the bill as "a sweeping and reckless attempt to shield some of the largest and most powerful corporations in the world – from big tech monopolies to RealPage, UnitedHealth Group and others – from any sort of accountability."

The pushback from Republicans is founded on the desire to see the Department of Commerce leverage AI without state-level interference and to allow time for the establishment of a cohesive national AI policy. "We know we need to have a national standard," Rep. Brett Guthrie of Kentucky told Gothamist. The juxtaposition of federal versus state authority in the realm of technology regulation ignites a debate about the best approach to managing the growing influence and potential risks of artificial intelligence in American society.

State lawmakers, like New York Sen. Kristen Gonzalez, reacted to the proposed federal block with concern. In an interview with New York Public News Network, she underscored the significance of New York's measures, which include a requirement for AI companies to issue disclaimers distinguishing AI chatbots from human interaction. "To undermine those efforts with this overreaching and sweeping pause on enforcement would be an incredible blow to all of the constituents that we've worked to represent and protect," Gonzalez said, as reported by Gothamist.