The White House's new AI Action Plan includes a provision similar to a previously failed congressional moratorium on state-level AI regulation. This provision suggests that federal funding may be withheld from states with "burdensome" AI regulations that hinder the effectiveness of federal funding. The plan states that “AI is far too important to smother in bureaucracy at this early stage” and the government “should not allow AI-related Federal funding to be directed toward states with burdensome AI regulations that waste these funds.” The Office of Management and Budget will work with federal agencies to ensure that states' AI regulatory climates are considered when allocating funding. The Federal Communications Commission will also evaluate whether state AI regulations interfere with its operations.

The plan encourages rapid AI adoption and infrastructure expansion, while also addressing diversity and climate science concerns in government AI systems. Further details will be released in upcoming executive orders. The previously defeated congressional moratorium, which would have barred states from regulating AI for 10 years, faced opposition from Democrats and some Republicans, with concerns it could stifle data privacy and other tech-related rules.

Impact Statement: The White House's approach could significantly influence states' abilities to regulate AI, potentially creating a federal-level pressure against enacting stricter regulations.