Could a Federal AI Framework Override State Laws?  ## Metadata - Author: [[Hard Fork AI]] - Full Title: Could a Federal AI Framework Override State Laws? - Category: #podcasts - URL: https://share.snipd.com/episode/22d2e625-c776-4655-961e-fb5d0196d862 ## Document Notes ## Highlights - **Federal Push For One AI Standard** - The White House plans an executive order to create a federal AI standard and an AI litigation task force to challenge state AI laws. - Jaeden Schafer says this aims to prevent a “patchwork of 50 state regulatory regimes.” Transcript: Jaeden Schafer The White House is creating a new executive order in hopes to stop states from creating their own AI laws. Today on the show, we're going to be talking about the new drafted executive order, which is soon to be signed by President Donald Trump, that is going to challenge states' efforts to Make their own AI laws. It's going to establish an AI task force to launch lawsuits and stop federal funding for states that have contested AI laws. And this is something that is being That's supported in one way or another by Sam Altman's OpenAI and also the venture capital firm Andresen Horwitz, who essentially oppose a state-by Policy approach. So this is a very interesting moment to see if the federal government, if the heads of industry will stop this or if there's going to be kind of a battle throughout the states we're going To be diving into all of this on the show today but before we do i wanted to mention that if you want to try all of the ai models i talk about on the show i'd love for you to check out my own startup Which is called aibox.ai i'll leave a link in the description you get access to all of the top ai models from google OpenAI, Anthropic. You get everything for image generation, tons of different AI image models, tons of different audio models, 11 labs and OpenAI's audio stuff. So it's all 20 bucks a month, all in one platform. You can compare the results side by side of different models, chat with them all in the same thread, and you only have one subscription and one login. So if you want to check that out, it is AIbox.ai and I will leave a link in the description. All right, let's get into what's going on at the White House with the new executive order. So this is going to be signed by President Donald Trump soon. The draft of this came out a little bit after Trump publicly called for a single federal standard to AI. His direct quote was instead of a patchwork of 50 state regulatory regimes. With this new order that would come out, the Attorney General, which is Pam Bondi, she would have about 30 days to establish a quote-unquote AI litigation task force, and their only Task would be to challenge states and their AI laws. ([Time 0:00:44](https://share.snipd.com/snip/97a801a4-eea6-4808-8394-abe9d18c5e94)) - **Legal And Funding Levers Against States** - The order would direct the Attorney General to set up a litigation task force within 30 days to sue states over AI rules. - It may also make states with contested AI laws ineligible for federal broadband funds, per Jaeden Schafer's summary. Transcript: Jaeden Schafer This, I think, is directly pointed at a number of states. I know that Florida is working on legislation. California has already come up with legislation. And so I think the federal government is concerned that if all of the different states enacting different AI regulations, that essentially it's a race to the bottom or AI companies Are going to just have to cater to the most stringent demands of whatever state has the most regulation, which at this point feels like it's going to be California. So California would essentially be setting the AI laws for the country. Now, I think there's going to be a lot of arguments about this from all sides. This order was first reported by the information. It's not finalized yet, I'll say. And I think over at the White House, they're like not talking to any reporters about it. But it apparently is also going to direct the Commerce Secretary, who is Howard Letnick, an ally, close ally of Trump, to tell states with contested AI laws that they're ineligible For funds after the Federal Broadband Equity Access and Deployment Program bred. It's more than $42 billion that has been allocated to funding all US states and territories. ([Time 0:02:44](https://share.snipd.com/snip/1ad8adfd-6d41-4504-9451-5689a3f3d828)) - **Industry Favors National Uniformity** - Major industry players like Sam Altman and Andreessen Horowitz back a single federal approach to avoid inconsistent state rules. - Jaeden Schafer argues a single standard reduces compliance complexity for startups and companies. Transcript: Jaeden Schafer The way that the order is currently written, it would be a big win for the AI industry, which is growing a lot. Sam Altman, and of course, Andreessen Horwitz, one of the number one VCs, a bunch of other Silicon Valley people, are all contesting the kind of state-by policy approach. And I'll be honest, I think it actually is pretty confusing and complicated for a startup and for an AI company to have to deal with every different state creating their own laws. I think that's going to become a tricky place if we can have something that's just standardized across the entire country. That would be, in my opinion, the best option. So it's kind of tricky because people like myself, and I think a lot of people that might take that opinion as well. On the one hand, you see that as, you know, like less of a headache for AI startups, and maybe we can worry less about regulation and get get a move on with creating innovative products. But on the other hand, people are saying like, Oh, well, you know, it's just like Sam Altman telling, you know, the White House what to do, blah, blah, blah. At the end of the day, I think the industry leaders, yes, it's in their best interest, and they going to make more money from it. But I also think for users, it's you're going to get a better product and it's probably just a better thing overall. ([Time 0:04:02](https://share.snipd.com/snip/9a79b796-2d0e-4dda-b329-ce593573cbe6)) - **Favor National Rules To Cut Complexity** - Standardizing AI rules nationally eases operational burden for startups that otherwise face varied state laws. - Jaeden Schafer suggests federal rules are preferable to juggling 50 different regulatory regimes. Transcript: Jaeden Schafer I think that's going to become a tricky place if we can have something that's just standardized across the entire country. That would be, in my opinion, the best option. So it's kind of tricky because people like myself, and I think a lot of people that might take that opinion as well. On the one hand, you see that as, you know, like less of a headache for AI startups, and maybe we can worry less about regulation and get get a move on with creating innovative products. But on the other hand, people are saying like, Oh, well, you know, it's just like Sam Altman telling, you know, the White House what to do, blah, blah, blah. At the end of the day, I think the industry leaders, yes, it's in their best interest, and they going to make more money from it. But I also think for users, it's you're going to get a better product and it's probably just a better thing overall. But, you know, of course, that's my opinion. It would be a really big blow to state lawmakers across the country who are all trying to make a whole bunch of different bills right now. They're trying to place guardrails on the new technology. I think like personally, beyond just like passing things in in different states, particularly, I think it would be great. Like I love the guardrails that a lot of these different states or people are are thinking of, I would love it if they could bring it to to the federal government and try to have things pass. ([Time 0:04:29](https://share.snipd.com/snip/476a88b7-5d66-4e54-80bc-641423b66b58)) - **Political Framing Risks Polarizing AI Rules** - Critics view the federal move as favoring tech billionaires and weakening state attempts to impose AI guardrails. - Jaeden Schafer warns against partisan framing and urges focus on common-sense AI regulation. Transcript: Jaeden Schafer The New York State Assembly member Alex Boros, he co-sponsored a state AI safety bill. And he said that this executive order is, a blank check to Donald Trump's tech billionaire backers who've already made a fortune and now stand to profit exponentially more from allowing Unconstrained AI to wipe out jobs, destroy our kids' brains, and drive electricity bills through the roof. Okay. I, like, I love AI guardrails. And I, so I just, I think it's kind of as the whole industry a disservice when you have someone like Alex Burroughs making a statement like that that is obviously so politically charged And so biased, right? Like, Donald Trump's tech billionaire's blank check. Like, it seems so politically charged towards Donald Trump. I don't think we want to make this a partisan issue. I think we want to just say, what is common sense for AI regulation? And how can we get the whole country involved? ([Time 0:06:16](https://share.snipd.com/snip/630f57b6-b83f-4fd6-b4e4-6db691ec91b2)) - **Personal Example: Rising Electricity Costs** - Jaeden Schafer describes living in Arizona where data center deals raised local electricity costs dramatically. - He cites paying $1,000 monthly for a 1,700 sq ft home as a real example of rising bills near data centers. Transcript: Jaeden Schafer One that I'll give him his flowers for is, yes, I believe a lot of these data centers and these big AI companies are making deals with states particularly. So also, this is a state problem. This isn't a federal problem. So really, I think he should be talking to other states. But states are making deals with a lot of these big companies to give them deals and incentives and tax breaks to build their data centers. Now, they're going to get subsidized electricity costs, which what is subsidized electricity costs for data center? I mean, it just means that everyone that actually lives there, their electrical bills will go up. I've seen this in Arizona. When I was living there, our electrical bill is absolutely insane. I've paid $1,000 a month for a 1,700 square foot home for electricity, which to me, was just crazy considering that like doubled or tripled since I purchased the home like five years Before. ([Time 0:08:05](https://share.snipd.com/snip/34c7bc85-dc51-45e2-a271-320059a5b86f)) - **State Deals Can Shift Energy Costs Locally** - States grant incentives to attract data centers, which can push local electricity costs up for residents. - Jaeden Schafer links state-level economic deals to broader energy and public-cost concerns. Transcript: Jaeden Schafer So also, this is a state problem. This isn't a federal problem. So really, I think he should be talking to other states. But states are making deals with a lot of these big companies to give them deals and incentives and tax breaks to build their data centers. Now, they're going to get subsidized electricity costs, which what is subsidized electricity costs for data center? I mean, it just means that everyone that actually lives there, their electrical bills will go up. I've seen this in Arizona. When I was living there, our electrical bill is absolutely insane. I've paid $1,000 a month for a 1,700 square foot home for electricity, which to me, was just crazy considering that like doubled or tripled since I purchased the home like five years Before. So I think that there's definitely like cause to be upset about those things. So as long as he's taking that approach, I'm happy. But I've heard other people and like an angle I've heard other people is like electrical bills are going to go through the roof because we're all using way more AI and we don't have enough Like electrical capacity. So we need to slow down the AI so that we don't do that. I don't like that approach. I think we should build more electrical facilities if we have more electrical demand, not slow down people from building. I've heard some great, I've heard some great ideas. I don't know how many of them are coming through because you know, sometimes you hear these politicians spitball. But like, I think there was a recent talk where Donald Trump was saying, every time you're building a data center, we're like, we're authorizing you to build an electrical plant that's Attached to it to fuel your data center. I don't know how many people are actually doing this. I think that this is a good idea. I mean, from a layman's perspective, I'm sure there's experts out there who are like, enraged at me for thinking this outrageous idea is possible. So I mean, I don't know that much about electrical plant facilities and data center build outs. Conceptually, that sounds like a good idea. If you don't want to have to subsidize the electrical bills of these data centers. So I think that there's a lot of interesting things we can do. ([Time 0:08:12](https://share.snipd.com/snip/e6a071a8-346a-4a54-95b8-7545b9e161ce))