Administration Releases National AI Legislative Framework

Action: The Administration released a framework containing recommendations for Congress to address six priorities, including protecting children and preventing censorship. Notably, the framework calls for Federal preemption of state laws regulating AI. Some lawmakers in both parties have opposed this and want the states to keep some rights to regulate AI and AI-derived content (for instance, protecting against deepfakes).¹ The framework also states that the Administration believes that training AI models on copyrighted material does not violate copyright laws but supports allowing courts to resolve this issue.

Trusted Insights for What’s Ahead^®

• The Administration’s statement on preemption of state AI laws follows a December 2025 Executive Order directing the Attorney General to challenge state laws deemed inconsistent with the Administration’s goal of advancing US global AI dominance. Congress had also previously considered implementing a ban on state AI regulations, but that effort failed.
• The Administration argues that patchwork regulatory frameworks across states generate unnecessary burdens on AI developers and hinder innovation.² Opponents argue that state AI frameworks are necessary to protect core state interests; promote transparency and safety as well as innovation; restrict unauthorized use of people’s voices and images; protect whistleblowers; and protect legitimate copyright interests. In addition, some states have also rejected efforts to regulate AI strictly; California’s Governor vetoed a bill that would have restricted employers’ use of AI.
• The Administration’s framework also suggests that residential ratepayers should be protected from rising energy costs resulting from data centers while Congress should also streamline Federal permitting for developing AI infrastructure.
• Some key legislators, including the House Speaker, support the framework.
• A Republican Senator released a proposed TRUMP AMERICA AI Act,³ which purports to codify the Administration’s legislative framework. However, that bill includes certain key differences from the Administration’s position, including affirming a right of action to state attorneys general as well as to the Justice Department for tort claims involving AI.
• The proposed legislation also includes requirements for social media platforms to implement protections for children under the Kids Online Safety Act and would sunset Section 230 of the Communications Decency Act, which has provided protections for online platforms. The bill would also affirm rights of owners and originators of intellectual property under the NO FAKES Act, stating that unauthorized reproduction of copyrighted material does not constitute fair use. It also requires the Labor Department to issue quarterly reports on job losses and displacements from AI and reestablishes, with a different emphasis, certain Biden Administration initiatives, such as a Center for AI Standard and Innovation at the National Institute for Standards and Technology.
• However, the prospects for legislative action are uncertain given a lack of consensus on key policy issues and a crowded legislative calendar in an election year.
• What this means for business: Key elements of the framework -- and Congressional bills on AI -- face uncertain legislative prospects. However, the framework provides insight into the Administration’s thinking about key policy issues, including intellectual property, state regulation, and permitting. Businesses should closely monitor the evolving legal and regulatory environments at both the Federal and state levels. Firms should also consider how action regarding permitting reforms, energy costs, and intellectual property rights may impact them.