Federal AI Moratorium Seeks Override of Multiple State Regulations

States are actively legislating AI regulations amid concerns about the technology's rapid development, with some focusing on AI companion chatbots and their potential benefits and harms, especially to minors. Colorado's AI Act, a comprehensive framework addressing algorithmic discrimination and risk management, is set to take effect in 2026 despite legislative debates and lobbying for delay. In contrast, California's proposed stringent AI regulations have raised economic concerns, with critics warning of high compliance costs and job losses that could stifle innovation. Meanwhile, at the federal level, a provision quietly inserted into a budget reconciliation package seeks to impose a decade-long moratorium on state and local AI regulations, threatening to nullify existing state laws on issues such as AI-driven scams and child protections. This federal move, supported by major tech companies, faces legal challenges but signals a push for regulatory preemption that could undermine state efforts to govern AI responsibly. Experts and lawmakers continue to debate the balance between innovation, privacy, and consumer protections as the AI regulatory landscape evolves.