The Preemption Gambit
The past year set up a clear clash between federal deregulatory efforts and state-level AI rulemaking, and 2026 is poised to be the year that conflict materializes in earnest. The Trump Administration signaled a strong preference for scaling back AI-specific rules while exploring avenues to preempt state and local measures, even as a growing number of states moved forward with their own frameworks. In short, 2025 laid the groundwork, and 2026 is likely to deliver the confrontation.
State-Level Reality
Despite federal signaling, states did not stand still. California's SB 53 established a first-in-the-nation set of standardized safety disclosure and governance obligations for developers of frontier AI systems, underscoring state willingness to regulate despite federal headwinds. Colorado's Anti-Discrimination in AI Law remained intact through the 2025 session and is scheduled to take effect in June 2026, setting a near-term compliance deadline that will shape risk assessments and product planning.
The Practical Problem
Looking ahead, expect 2026 to feature litigation over the scope of preemption, increased enforcement actions from federal agencies, and a push toward a federal legislative framework, alongside continued state innovation in AI governance.
My view: Companies are trapped. State laws are enforceable today. Federal preemption is uncertain and years away. The rational response is to comply with the strictest requirement (California/Colorado) nationally, which effectively makes California the de facto federal AI regulator. Expect that dynamic to persist through 2026 and beyond, regardless of federal rhetoric.
