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On artificial intelligence policy, it’s California versus Congress

March 31, 2026

The White House recently released its National Policy Framework for Artificial Intelligence, a blueprint that calls on Congress to preempt burdensome state AI laws and establish a unified national standard. This framework marks an important moment for national technology policy because it addresses the growing crisis of states — especially California — attempting to dictate policy for the entire nation.

A coherent national policy is essential for both economic and geopolitical reasons. As the United States races against China for global leadership in advanced technology, California is rushing to impose its will on companies and consumers before the federal government acts. In its haste to regulate and set the rules, California is creating heavy compliance burdens — especially for small businesses — and opening the door to lawsuits that exploit vague definitions and open-ended bill language.

Unsurprisingly, California’s headlong sprint to always be the first state to regulate has positioned it as one of the country’s leading troublemakers when it comes to AI policy. Politicians in Sacramento know better than anyone that the state’s massive economy means it can often muscle everyone else into submission. What California says goes well beyond its borders — and they know it.

The idea is so frequently recycled that it’s been coined the “Sacramento effect,” regulating everything from automotive and environmental standards to privacy and now Artificial Intelligence.

Don’t take our word for it: when Sen. Steve Padilla, D-San Diego, introduced his AI bill package, his own office claimed that California was looking to use its “economic muscle to reimagine artificial intelligence.” Padilla even boasted that California will “use its market power to create the norm for responsible and ethical AI development.”

Sacramento is cranking out an astonishing number of regulatory proposals on almost every AI-related issue imaginable. With almost 90 AI-related measures pending, California ranks as a top three producer of AI proposals this year, and many of the most onerous rules are passing.

Several of the laws that have already passed or are under consideration in California would raise interstate commerce issues and potentially conflict with important national priorities in ensuring a robust market for AI innovation and investment. “Congress should preempt state AI laws that impose undue burdens to ensure a minimally burdensome national standard,” the new White House framework notes. “Preemption must ensure that State laws “do not govern areas better suited to the Federal Government” or act contrary to the United States’ “national strategy to achieve global AI dominance,” it says.

California has already done a lot to undermine such a framework, with more likely to come. In 2025, California enacted the Transparency in Frontier Artificial Intelligence Act, which required large AI companies to disclose and publish frameworks on how they assess and mitigate “catastrophic risk,” including chemical, biological, radiological and nuclear weapons. These are matters of national security more aptly regulated by the federal policymakers with the clearances and knowledge of how to balance these risks.

California has also passed completely unrelated laws on generative AI content and provenance tracking marketed as “transparency laws.” Gov. Gavin Newsom encourages the Legislature to revisit the California AI Transparency Act in 2026, warning that the law suffered from “unintended consequences” and threatened “user privacy.” He signed the bill anyway, and now California must rush to fix it before it goes into effect this August.

Meanwhile, California enacted the most misguided algorithmic pricing regulation in the country when it amended the state’s antitrust statutes to ban “common pricing algorithm[s].” As one scholar notes, the law is so broad it “effectively regulates all market transactions.”

Even more meddlesome, Golden State AI mandates are in the works on a wide range of issues, including the use of AI in the workplace, health care and chatbots. Many of these and other California regulatory measures introduce open-ended theories of “discrimination” and “fairness” that are confusing and will require time and many paperwork hours. More worrying is that these AI bills make it easy for trial lawyers to exploit the rules and file a flood of frivolous lawsuits.

The costs are mounting, and if California gets its way, the whole country will be left to pick up the tab. The price we pay here won’t just be monetary — it will be paid in lost innovation, unintended consequences and a dangerously weakened position in the global AI race against China.

Adam Thierer is a senior fellow for technology and innovation at the R Street Institute. Logan Kolas is the director of technology policy at the American Consumer Institute.

Orange County Register

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On artificial intelligence policy, it’s California versus Congress

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