US House Imposes 10-Year AI Legislation Moratorium Amid Safety, Censorship Debate

The rapid development and implementation of artificial intelligence (AI) present both significant opportunities and challenges across sectors, with regulatory and policy issues at the forefront. In the U.S., the House passed a 10-year moratorium on state-level AI legislation to maintain national competitiveness against adversaries like China, though this has raised concerns about states' ability to protect free speech from Big Tech censorship. Meanwhile, businesses must navigate complex legal frameworks such as the EU AI Act, which categorizes AI systems by risk and mandates strict assessments for high-risk AI applications, while U.S. states are increasingly enacting their own AI laws in the absence of federal legislation. In financial services, AI adoption is accelerating, especially for fraud detection and cybersecurity, but firms seek clearer regulatory guidance rather than new rules, urging regulators to provide practical support and resources to foster compliant innovation. Industry leaders like Capgemini emphasize that while AI, including generative AI, can improve productivity, cost savings are not guaranteed, and quality and thorough review remain critical, underscoring the nuanced impact of AI on operations. Additionally, calls have been made for a fresh approach to AI explainability in banking to better align AI decision-making with regulatory expectations and operational realities.