[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
AI AT A CROSSROADS: A NATIONWIDE STRATEGY
OR CALIFORNICATION?
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COURTS, INTELLECTUAL
PROPERTY, ARTIFICIAL INTELLIGENCE, AND
THE INTERNET
OF THE
COMMITTEE ON THE JUDICIARY
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
THURSDAY, SEPTEMBER 18, 2025
__________
Serial No. 119-36
__________
Printed for the use of the Committee on the Judiciary
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via: http://judiciary.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
61-690 WASHINGTON : 2025
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COMMITTEE ON THE JUDICIARY
JIM JORDAN, Ohio, Chair
DARRELL ISSA, California JAMIE RASKIN, Maryland, Ranking
ANDY BIGGS, Arizona Member
TOM McCLINTOCK, California JERROLD NADLER, New York
THOMAS P. TIFFANY, Wisconsin ZOE LOFGREN, California
THOMAS MASSIE, Kentucky STEVE COHEN, Tennessee
CHIP ROY, Texas HENRY C. ``HANK'' JOHNSON, Jr.,
SCOTT FITZGERALD, Wisconsin Georgia
BEN CLINE, Virginia ERIC SWALWELL, California
LANCE GOODEN, Texas TED LIEU, California
JEFFERSON VAN DREW, New Jersey PRAMILA JAYAPAL, Washington
TROY E. NEHLS, Texas J. LUIS CORREA, California
BARRY MOORE, Alabama MARY GAY SCANLON, Pennsylvania
KEVIN KILEY, California JOE NEGUSE, Colorado
HARRIET M. HAGEMAN, Wyoming LUCY McBATH, Georgia
LAUREL M. LEE, Florida DEBORAH K. ROSS, North Carolina
WESLEY HUNT, Texas BECCA BALINT, Vermont
RUSSELL FRY, South Carolina JESUS G. ``CHUY'' GARCIA, Illinois
GLENN GROTHMAN, Wisconsin SYDNEY KAMLAGER-DOVE, California
BRAD KNOTT, North Carolina JARED MOSKOWITZ, Florida
MARK HARRIS, North Carolina DANIEL S. GOLDMAN, New York
ROBERT F. ONDER, Jr., Missouri JASMINE CROCKETT, Texas
DEREK SCHMIDT, Kansas
BRANDON GILL, Texas
MICHAEL BAUMGARTNER, Washington
------
SUBCOMMITTEE ON COURTS, INTELLECTUAL PROPERTY,
ARTIFICIAL INTELLIGENCE, AND THE INTERNET
DARRELL ISSA, California, Chair
THOMAS MASSIE, Kentucky HENRY C. ``HANK'' JOHNSON, Jr.,
SCOTT FITZGERALD, Wisconsin Georgia, Ranking Member
BEN CLINE, Virginia ZOE LOFGREN, California
LANCE GOODEN, Texas TED LIEU, California
KEVIN KILEY, California JOE NEGUSE, Colorado
LAUREL LEE, Florida DEBORAH ROSS, North Carolina
RUSSELL FRY, South Carolina ERIC SWALWELL, California
MICHAEL BAUMGARTNER, Washington SYDNEY KAMLAGER-DOVE, California
CHRISTOPHER HIXON, Majority Staff Director
ARTHUR EWENCZYK, Minority Staff Director
C O N T E N T S
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Thursday, September 18, 2025
OPENING STATEMENTS
Page
The Honorable Darrell Issa, Chair of the Subcommittee on Courts,
Intellectual Property, Artificial Intelligence, and the
Internet from the State of California.......................... 1
The Honorable Henry C. ``Hank'' Johnson, Ranking Member of the
Subcommittee on Courts, Intellectual Property, Artificial
Intelligence, and the Internet from the State of Georgia....... 3
The Honorable Jamie Raskin, Ranking Member of the Committee on
the Judiciary from the State of Maryland....................... 42
WITNESSES
Dr. David Bray, Chair, Loomis Council Member & Distinguished
Fellow, Stimson Center
Oral Testimony................................................. 6
Prepared Testimony............................................. 8
Kevin Frazier, AI Innovation and Law Fellow, University of Texas
School of Law
Oral Testimony................................................. 12
Prepared Testimony............................................. 14
Adam Thierer, Senior Technology & Innovation Fellow, R Street
Institute
Oral Testimony................................................. 21
Prepared Testimony............................................. 23
Neil Richards, Koch Distinguished Professor in Law, Washington
University Law
Oral Testimony................................................. 33
Prepared Testimony............................................. 35
LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING
All materials submitted for the record by the Subcommittee on
Courts, Intellectual Property, Artificial Intelligence, and the
Internet are listed below...................................... 65
A letter to the Honorable Jim Jordan, Chair of the Committee on
the Judiciary from the State of from the Ohio, the Honorable
Jamie Raskin, Ranking Member of the Committee on the Judiciary
from the State of Maryland,the Honorable Darrell Issa, Chair of
the Subcommittee on Courts, Intellectual Property, Artificial
Intelligence, and the Internet from the State of California,
and the Honorable Henry C. ``Hank'' Johnson, Ranking Member of
the Subcommittee on Courts, Intellectual Property, Artificial
Intelligence, and the Internet from the State of Georgia, from
Privacy Protection Agency, Sacramento, California, Sept. 17,
2025, submitted by Zoe Lofgren, a Member of the Subcommittee on
Courts, Intellectual Property, Artificial Intelligence, and the
Internet from the State of California, for the record
A letter to the Honorable Darrell Issa, Chair of the Subcommittee
on Courts, Intellectual Property, Artificial Intelligence, and
the Internet from the State of California, and the Honorable
Henry C. ``Hank'' Johnson, Ranking Member of the Subcommittee
on Courts, Intellectual Property, Artificial Intelligence, and
the Internet from the State of Georgia, from the Council for
Innovation Promotion (C4IP), Sept. 18, 2025, submitted by the
Honorable Deborah Ross, a Member of the Subcommittee on Courts,
Intellectual Property, Artificial Intelligence, and the
Internet from the State of North Carolina, for the record
Materials submitted by the Honorable Henry C. ``Hank'' Johnson,
Ranking Member of the Subcommittee on Courts, Intellectual
Property, Artificial Intelligence, and the Internet from the
State of Georgia, for the record
A letter to the Honorable Darrell Issa, Chair of the
Subcommittee on Courts, Intellectual Property, Artificial
Intelligence, and the Internet from the State of
California, and the Honorable Henry C. ``Hank'' Johnson,
Ranking Member of the Subcommittee on Courts,
Intellectual Property, Artificial Intelligence, and the
Internet from the State of Georgia, from Alejandra
Montoya-Boyer, Vice President, Center for Civil Rights
and Technology, The Leadership Conference on Civil and
Human Rights, Sept. 18, 2025
A statement enitled, ``Don't Ban State AI Laws--Let
Innovation Compete Fairly,'' Sept. 18, 2025, Bria AI
A letter to the Honorable John Thune Majority Leader, U.S.
Senate, and the Honorable Henry C. ``Hank'' Johnson,
Ranking Member of the Subcommittee on Courts,
Intellectual Property, Artificial Intelligence, and the
Internet from the State of Georgia, regarding the One Big
Beautiful Bill Act, from multiple Republican governors,
Jun. 27, 2025
Materials submitted by the Honorable Darrell Issa, Chair of the
Subcommittee on Courts, Intellectual Property, Artificial
Intelligence, and the Internet from the State of California,
for the record
A letter to the Honorable Darrell Issa, Chair of the
Subcommittee on Courts, Intellectual Property, Artificial
Intelligence, and the Internet from the State of
California, and and the Honorable Henry C. ``Hank''
Johnson, Ranking Member of the Subcommittee on Courts,
Intellectual Property, Artificial Intelligence, and the
Internet from the State of Georgia, from Engine Advocacy,
Sept. 16, 2025
A letter to the Honorable Darrell Issa, Chair of the
Subcommittee on Courts, Intellectual Property, Artificial
Intelligence, and the Internet from the State of
California, and the Members of the Subcommittee on
Courts, Intellectual Property, Artificial Intelligence,
and the Internet, from Americans for Prosperity, Sept.
18, 2025
An article entitled, ``The California-Washington tech fight
heats up,'' Sept. 16, 2025, Politico
An article entitled, `` `We don't want California to set
rules for AI across the country,' Trump adviser says,''
Sept. 16. 2025, Politico
A document entitled, ``Winning the Race: America's AI Action
PLAN,'' Jul. 2025, The White House
A bill H.R. 10550, 118th Congress, 2D Session, Dec. 20, 2024
A speech by Vice President J.D. Vance entitled, ``Remarks by
the Vice President at the Artificial Intelligence Action
Summit in Paris, France,'' Feb. 11, 2025, The American
Presidency Project
QUESTIONS AND RESPONSES FOR THE RECORD
Questions submitted by the Honorable Darrell Issa, Chair of the
Subcommittee on Courts, Intellectual Property, Artificial
Intelligence, and the Internet from the State of California
Questions for Adam Thierer, Senior Technology & Innovation
Fellow, R Street Institute
Response to questions from Adam Thierer, Senior Technology &
Innovation Fellow, R Street Institute
Questions for Kevin Frazier, AI Innovation and Law Fellow,
University of Texas School of Law
Response to questions from Kevin Frazier, AI Innovation and
Law Fellow, University of Texas School of Law
Questions for Dr. David Bray, Chair, Loomis Council Member &
Distinguished Fellow, Stimson Center
Response to questions from Dr. David Bray, Chair, Loomis
Council Member & Distinguished Fellow, Stimson Center
AI AT A CROSSROADS: A NATIONWIDE STRATEGY OR CALIFORNICATION?
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Thursday, September 18, 2025
House of Representatives
Subcommittee on Courts, Intellectual Property, and
Artificial Intelligence, and the Internet
Committee on the Judiciary
Washington, DC
The Committee met, pursuant to notice, at 10 a.m., in Room
2141, Rayburn House Office Building, the Hon. Darrell Issa
[Chair of the Subcommittee] presiding.
Members present: Representatives Issa, Massie, Fitzgerald,
Cline, Gooden, Kiley, Lee, Fry, Baumgartner, Johnson, Lofgren,
Lieu, Neguse, Ross, Swalwell, and Kamlager-Dove.
Also present: Representatives Correa and Raskin.
Mr. Issa. The Committee will come to order. Actually, I do
have to--the Subcommittee will come to order. Without
objection, the Chair is recognized to declare a recess at any
time. We welcome everyone here today for a hearing on the
future of AI policy. I will note that this will be perhaps the
last in a long series of AI hearings before several pieces of
legislation will be marked up.
I encourage the Members on both sides of the aisle to make
sure that this panel of witnesses are asked questions that may
be germane to proposed legislation, or legislation already
offered.
I now recognize myself for an opening statement. Literally
a generation ago, or in technology, ten generations ago, a
sharp young man graduated from Cal State San Marcos in my
Congressional district. He joined a company that I then was CEO
of Directed Electronics, which had an inherent inventory
problem.
The inventory problem was that we had a few SKUs that sold
well, and we managed, and hundreds of SKUs that were constantly
either out or over supply. It wasn't anyone's fault, we had
simply grown quickly, and there was a certain amount of
inconsistency in what was being sold in a given month.
That bright young man took all that inventory in the
records, and put it into SuperCalc, a precursor to Microsoft
Excel. Within weeks, we had reduced our out of stock, increased
our same day delivery, trimmed inventory to a level that
actually saved us over a million dollars a year in inventory
maintenance costs. That bright young man continued to work at
the company for many years.
He did not continue to use SuperCalc for long, because
technology quickly gave better and better tools. The man, the
program, and the machine. Both are necessary to implement and
make AI a reality. It was the man who made the machine that
made the man a success. Over the last century the U.S. has led
the way in virtually every area of technology because of our
pro-innovation bias.
We are the innovators, while China are the duplicators, and
Europe, yes, are the regulators. As we speak, though, my home
State of California, with an economy larger than that of Italy,
is rivaling the European Union when it comes to trying to lead
on regulation. This wouldn't be such an ironic occurrence,
except we are the home of innovation, and yes, the new bastion
of regulation.
Just as in the 1990s when America led the internet
revolution, a light touch such as that offered by the President
in his initiative, in fact must be the direction we go.
Anything else will give us a problem that I will describe. If
we in fact are not innovating ten times faster than we are
regulating, if the speed of innovation in the U.S. is not at
least months or if possibly years ahead of China, their speed
of duplication, some of it actually using AI to duplicate what
we are doing will, in fact, cause us to lose our edge.
My home State is part of the problem, the European Union is
part of the problem, but as you will see from our witnesses
today, all fifty States have implemented some form of AI
regulation, and in fact there are in the neighborhood of a
thousand pieces of legislation spread over fifty States, that
will create, if allowed to continue, a patchwork of indecision
by the AI industry.
Given conflicting regulations, given the inability to roll
out with certainty, technology, that technology will simply not
be a priority. Let there be no doubt though. Either we win in
innovation, and we win in AI, or we lose our edge on the
international stage. Vice President Vance said it best,
``America's AI technology must remain the gold standard
worldwide.''
We must continue to produce the next generation AI, and we
cannot do it with a patchwork of conflicting State laws. As of
now, we are ahead, let there be no doubt. We are ahead in
hardware, and we are ahead in software development. We are also
on the leading edge of having the solutions for the energy
problems. That includes modular nuclear reactors, it includes a
willingness to provide innovative solutions.
During the last break I went to one of Apple's facilities,
almost 17 hundred acres located near Sparks, Nevada. What I saw
there were some of the most impressive, simple buildings,
filled with endless rows of various levels of chips for both AI
and conventional data storage. What I also saw was a system
that used zero conventional air conditioning to maintain that
cooling.
They had managed to beat one of the major causes of
unrelated energy consumption, which was air conditioning,
through an innovative system of evaporative coolers from
locally available water, and a filtration system that allowed
those to operate twenty-four seven without in any way being
damaged by the high flow of air.
They are making advances. This is over and above the
innovation that we see in chips, and the ones that we plan to,
and the additional power. I am going to contrast just over the
border from California, this location in Sparks, Nevada.
Because it has 64 gigawatts of generation power. Why would they
need it? Well, they would only need it in case of a power
failure.
Not so, the first time all was operational to prevent
blackout in California, because California lacked the power,
and by their going offline, Nevada was able to export power
into my home State. That tells you a lot about the innovation
in California, but not the ability to have those great new
centers located there. In fact, Virginia, just a mile from
here, is the No. 1 location, and other States are competing
aggressively for it, and if nothing changes, they will win.
These new laws will also affect early stage development
because technical experts, let alone lawmakers, are not capable
today of predicting where we will be tomorrow. Earlier this
year in fact, overnight, the thinking on AI development and
power needed took a sharp change, and everyone on both sides of
the Atlantic and Pacific are learning from what was released,
and that will continue.
Of course, I don't want to be just a nay sayer, because in
fact I am from an innovative State. I am from a State that is
second to none in finding the best, the brightest, and bringing
them here. Although this Subcommittee does not have
jurisdiction over immigration, I want to make it clear here
that AI development will also be about this Committee working
in a bipartisan basis to find ways to not just attract, but to
retain the best and the brightest for that development.
Let there be no doubt, there are three hundred thousand
Chinese students studying in America, and most of them are
being told to come home and bring with them what they are
learning here. The release of the new AI Action Plan signaled
to the world that the Trump Administration needs Congress to
legislate America first AI. Now, I know that sounds pejorative,
but it isn't.
The fact is that whether it was catching up on, if you
will, the interstate superhighway under Al Gore, Sr., or it was
leading on taking the ARPANET, and turning it into the
internet, we have worked together in the past. We have worked
to limit States, and to limit restraining our own over
regulation for the benefit of our economy, and it has worked.
I want to welcome the President's leadership and look
forward to working again to promote it. I want to additionally
say that we have partners on both sides of the aisle. This
Committee, including--she is not here right now, but Zoe
Lofgren and others have been great partners in this in the
past, and I expect they will be. Again, I just want to leave us
with one truism.
America has innovated and out innovated the countries
around the world for generations. Europe has become a
regulator, and an admirer of our technology without embracing
the way you get it. China has become the most efficient stealer
of technology, and the term duplication, if it was truly
innovation, would be a compliment, but it isn't.
With that, I recognize the Ranking Member for his opening
statement.
Mr. Johnson. Thank you, Chair. I say thank you to the
witnesses for your testimony today. When I drive from Georgia
to Washington, DC, about once every six months or so, and I get
a chance to listen to the radio, scan, and listen to all my
favorite stations and tunes, I have got to pass through three
States. I go through Virginia, I go through South Carolina, I
go through North Carolina, and then I hit Georgia.
We all have had experiences in crossing State lines before,
and you will have different speed limits, and different levels
of enforcement. You have the experience of figuring out what
are the rules. In other words, because you are going 79 miles
an hour at the State line, and then flip to another State, and
boom, all of a sudden the speed limit is 65.
You have got to do 74 to stop getting pulled over, and hope
that officers won't stop you. Anyway, when some suggested
earlier that we in Congress should preempt all State AI laws,
they would not just have done away with State's nascent
generative AI consumer protections, they would have preempted
common law causes of action against AI companies as well.
When the doctrine of caveat emptor, or buyer beware ruled
American jurisprudence, consumers had minimal protection and
were expected to thoroughly inspect products themselves.
Judicial interpretations began to change in the early middle
20th century as products became less straight forward, and more
complicated. Common law is developed to better protect
consumers, products liability, and negligence cases.
Today, most Americans can hardly imagine taking apart a
toaster, let alone an AI chat box to make sure that it works
correctly. Caveat emptor is effectively what advocates of a
moratorium are suggesting we revert to when we talk about an AI
moratorium. When you preempt an entire field of law, you are
preempting the common law right along with it.
Supreme Court law has repeatedly found as it did in Riegel
v. Medtronic, that a Federal law's reference to a State's
requirements include its common law duties. In plain language
that means if Congress preempts State AI laws, we also preempt
State common law, unless the legislation explicitly says
something else. Common law cases to protect consumers are
already being filed against generative AI platforms.
Two days ago, Senator Holly held a hearing on the harms to
children using AI technology, calling witnesses whose children
died or were hospitalized after interacting with artificial
intelligence chat bots. I know some of the parents and families
are in the room today. Kristin Bride, Juliana Arnold, Manny
Fernesse, and Megan Garcia. I am so sorry for what you all have
been through, and I admire your commitment to justice.
Common law is crucial to the protection of Americans
because it exists no matter whether there are comprehensive
State laws on the books, or no laws governing new technology on
the books. Even when there are no statutes, Common law helps us
set a floor for a standard of care as a society. When some of
my colleagues across the aisle talk about a moratorium,
preempting common law is exactly what they are talking about.
Carve outs might be offered for some areas of the law,
others may get a loose regulatory structure, but what many
don't realize is that the glue that holds the law together
would be wiped out in almost every scenario. By protecting
common law, we can protect that floor that ensures every person
harmed can seek to have their case heard before a court of law.
This basic standard of care can spur innovation by
preventing a race to the bottom, and it can offer a level of
security as the Federal Government and States determine what
the best next steps are for AI in the United States.
With that, Mr. Chair, I yield back.
Mr. Issa. I thank the gentleman. Does the gentleman from
California seek to be waived onto the Committee?
Mr. Correa. I do, sir.
Mr. Issa. Without objection, the gentleman will be waived
on, even though he is not a Member of the Subcommittee, and if
others yield time to him, he will be permitted to ask
questions. Without objection, so ordered. It is now my
pleasure, notwithstanding the Chair and Ranking Members
arriving, to introduce our distinguished panel of witnesses.
Dr. David Bray is a distinguished fellow and Chair of the
accelerator at the Alfred Lee Loomis, Innovative Consul at the
Stimson Center, he previously served as IT Chief at
Bioterrorism Preparation and Response Program at the CDC, and
in the intelligence community. Dr. Bray is the recipient of a
Joint Civilian Civil Commendation Award, and National
Intelligence Exceptional Achievement medal. Welcome.
Mr. Kevin Frazier is the AI innovation and law fellow at
the University of Texas law school. His research focuses on how
to design regulatory regimes that increase adoption and use of
AI. Mr. Frazier also leads the AI innovation and law program,
which prepares students for careers related to artificial
intelligence. Thank you for being here.
Mr. Adam Thierer is the Senior Fellow for technology and
innovation at the R Street Institute, a free market think tank.
His work focuses on cultivating emerging technologies. He
previously was Senior Fellow at the Mackinac Center, and was
President of the Progress and Freedom Foundation. Professor
Neil Richards is the Koch Distinguished Professor at Washington
University School of law.
Where he also codirects the Cordell Institute for Policy in
Medicine and Law. His work focuses on privacy law, information
law, and freedom of expression. We welcome all our witnesses
here, and as you may have seen on C-Span, it is the rule of the
Committee that all witnesses be sworn in. Would you please rise
to take the oath, and raise your right hand?
Do you solemnly swear or affirm under penalty of perjury
that the testimony you are about to give will be true and
correct to the best of your knowledge, information, and belief,
so help you God? Please be seated. Let the record reflect that
all witnesses answered in the affirmative.
As you also have heard many times, your true entire
statement, including reasonable, even if expansive additional
information you submit will be placed in the record. As a
result, if you are going to go past five minutes, do so by
extension, and summarize what you do, so we can leave time for
questions.
With that, we will begin. I want to make sure I get the
right name, Dr. Bray. After this it gets easy, we just go
across.
STATEMENT OF DR. DAVID BRAY
Dr. Bray. Thank you, Chair Issa, Ranking Member Johnson,
and the Members of the Committee. I appreciate the opportunity
to testify today. I am Dr. David Bray, Chair of the Looms
Accelerator at the Stimson Center, Principle at LeadDoAdapt
Ventures, Senior Advisor of General Catalyst Institute, and a
Fellow with the National Academy of Public Administration.
I work on tech, data, and geopolitical issues to help
startups scale, communities adapt, and legacy organizations
transform themselves amidst rapid global changes. My testimony
focuses on advancing reliable, trustworthy AI consistent with
the values of free societies and free markets from these
perspectives.
I place my comments in the context that the United is
experiencing multiple tech revolutions in addition to AI.
Advances in space technology, biotech, quantum tech, and the
nature of relation of sensors and robots all impacting U.S.
companies, our workforce, and our communities. With respect to
AI, I would like to mention three noteworthy advances to inform
our discussion.
First, active inference AI models themselves demonstrate
faster learning, and use less data, and less energy. Such
approaches can be bound by spatial or temporal limitations in
ways that are human readable, and interpretable across AI
systems. Each of us as individuals could in the future restrict
what AI systems do on our behalf.
Second, open weight AI models with open-source code have
shown that we can transform currently complicated processes,
such as a Veterans Affairs form, into a conversational
interface, dramatically reducing the time to complete, and
speeding access to care.
Third, federated learning allows AI systems to learn on
datasets where they exist with proper consent.
Empowering both individuals and organizations to choose if
their datasets and intellectual property are usable by AI and
negotiate a beneficial contractual relationship in return.
Given these advances, three guiding principles drive my
recommendations to the Subcommittee:
First principle: U.S. strategies for advancing AI should
recognize interdependencies between AI and other tech
advancements.
This requires a light touch policy framework. Recently, the
National Academy of Public Administration has illuminated
methods for sufficiently agile policy approaches to achieve
measurable goals at the pace necessary given global changes.
Second principle: Different AI methods carry different
risks and benefits. For example, AI approaches to computer
vision and expert systems follow predictable outcomes.
Whereas generative AI produces less predictable results. As
such, AI policies should reflect these differences in AI
methods.
Third principle: There have been multiple ways of AI
improvement over the years. We should expect continued
advancement, which means U.S. policy approaches must adapt
accordingly. For example, the Stimson Center's Loomis Council
intentionally brings together industry leaders to adapt
projects to new AI developments.
Even with different AI methods, and the need for continuous
adaptation, groups tied to specific domain applications of AI,
for example, healthcare, transportation, and finance, can
promote data level interoperability across AI systems, avoiding
silos. When electronic health record systems advanced in the
2000s, the United States encouraged the nonprofit Health Level
Seven to evolve an open standard framework for interoperable
clinical data with privacy controls.
We should do something similar now for health and AI. We
each deserve a choice as to when AI uses our data, and medical
doctors should not be hindered by noninteroperable AI systems.
Given these principles, my recommendations are as follows:
First recommendation: Our principles and policies should
help advance freedom, human agency, and individual liberties.
We face global competition from the Chinese Communist Party
regarding AI's future, including their AI Plus initiative. The
U.S. AI strategy must simultaneously encourage the advancements
of the entire U.S. AI industry, and encourage the industry to
advance individual freedoms.
Second recommendation: Upgrading existing domain specific
laws is more pragmatic than adapting new, sweeping AI
regulations.
I recommend a domain specific approach, because the risk of
different AI methods vary by application. Examples include
updating the Privacy Act of 1974, revisiting HIPAA, and
reviewing other existing laws where the speed, scale, and scope
of AI methods impact different risk calculus. Congress' recent
efforts to upgrade banking laws with respect to stable coins is
another example of updating existing statutes given to new
technologies.
Third recommendation: Assess what actions consistent with
U.S. values of freedom, human agency, and individual liberties
may need light touch policy to ensure AI advances freedoms
across our Nation. When updating policies that already exist,
we should bid on Justice Brandeis' concept of a right to be
left alone as law abiding citizens.
Including choices about when personal datasets are and are
not used by an AI, as well as when AI and any associated
intellectual property shared is processed locally as opposed to
a cloud-based incidence. Any national AI strategy should ensure
we do not stifle advancements toward reliable, trustworthy AI,
consistent with the values of both free societies and free
markets.
Thank you, and I look forward to your questions.
[The prepared statement of Mr. Bray follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Issa. Thank you. Mr. Frazier?
STATEMENT OF KEVIN FRAZIER
Mr. Frazier. Chair Issa, Ranking Member Johnson, and the
distinguished Members of the Committee, thank you for the
opportunity to testify. My name is Kevin Frazier, I am the AI
innovation and law fellow at the University of Texas School of
Law. Outside of teaching students, I believe there is no
greater purpose for academics than sharing knowledge with
policymakers.
This purpose is all more paramount when it comes to complex
challenges like harnessing AI to unleash human flourishing. A
few months ago, Dr. Jensen came before this Committee and
announced that the Nation that leads in AI will shape the
future. Nothing has changed in the interim. What remains
uncertain however is whether the U.S. will retain its leading
position.
My goal today is to address the proper role of the States
and the Federal Government in shaping AI policy. On governing
the use of AI, the Tenth Amendment reserves extensive authority
to the States to regulate within their borders. On the matter
of AI development, the founders offered their answer in
abandoning the Articles of Confederation and adopting a strong
centralized government capable of protecting and advancing the
national interest.
As I will explain in the rest of my testimony, the founders
infused three principles into our Constitution that when
applied to the AI discussion resolve debates about the
authority of each actor to shape AI development. Subsequent
changes in related areas of the law, namely the Commerce
Clause, have given rise to the false impression that muddy
judicial interpretation somehow relaxed these principles.
However, they remain as foundational today as they were two
hundred years ago. Adherence to these principles is essential
both as a matter of fidelity to the founders' vision, as well
as to securing an AI regulatory posture that aligns with our
Federal system.
The first principle is that the Federal Government alone is
responsible for matters that implicate the economic and
political stability of our country.
The emerging threats to national security and economic
stability posed by advances in AI place regulation of training
frontier AI models squarely in the authority of the national
government. To focus on one of many examples, AI has lowered
the barriers to the creation and deployment of bioweapons by
bad actors. Defensive measures have not progressed at the same
rate.
Experts warn that with significant technical progress the
Nation would still need to adopt extreme measures to ready
ourselves for a near future in which synthetic pathogens go
undetected. That effort will flounder with second rate AI.
Training frontier AI models, and by extension safeguarding our
national health and prosperity cannot be waylaid by State laws,
no matter how well intentioned.
Second, the extensive authorities reserved to each State
end at their respective borders. As the Supreme Court has
specified on multiple occasions, the equal sovereignty of the
States is a fundamental principle of our Constitution. Our
constitutional order does not condone one State to
intentionally and substantially interfere with the liberty and
freedom of another.
Political clout, economic might, more population grants one
State the authority to project its legislation into another.
Whether a State is the fourth largest economy in the world, or
the 104th largest has no bearing on its authority to shape the
lives of Americans beyond its borders.
Though the Supreme Court has tolerated the inevitability of
some regulatory spillover, its recent holding in National Port
Producers v. Ross does not permit the sorts of regulations
pending before many State legislatures, regulations that may
deny all Americans access to a good itself because of the
preferences of one political community.
Building new pig pens to satisfy the preferences of
Californians is technically and financially feasible. Training
two AI frontier models, one to comply with the preferences of a
single State, and one for the rest of us, is a billion dollar
undertaking that rests on uncertain and evolving realities.
Contradictory and vague State laws that impact AI
development may thwart the sort of technological progress that
has long fueled the American dream. Under a patchwork of State
laws that impact AI development, we will see that Americans may
never experience the education and healthcare that could have
been realized by a national approach to pursuing the AI
frontier.
The third principle is that the ultimate authority in our
constitutional system rests with the people. Our founders
aspired for every American to exercise meaningful control over
their daily lives. Extraterritorial regulation of AI
jeopardizes these and other features of individual agency.
The nature of AI development means that if labs are
compelled to comply with one State's regulations for model
training, those requirements will be imposed on the rest of the
country, rendering us all less likely to realize the benefits
of AI advances. Americans may be able to move as freely as they
like, but they would still find themselves using AI tailored by
State legislators over which they have no control.
Such a world is the antithesis of liberty. Denial or delay
of the most sophisticated AI as the result of flawed State
legislation is not a matter of mere inconvenience. It is a
question of access to the greatest driver of human flourishing
we have yet to develop.
Thank you again for inviting me here today, I look forward
to your questions.
[The prepared statement of Mr. Frazier follows:]
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Mr. Issa. Thank you. Mr. Thierer?
STATEMENT OF ADAM THIERER
Mr. Thierer. Chair Issa, Ranking Member Johnson, and the
Members of the Subcommittee, thank you for the invitation to
participate in this hearing. My name is Adam Thierer, and I am
a Senior Fellow at the R Street Institute, where I cover
emerging technology policy. My message here today boils down to
one simple point.
Congress needs to act promptly to formulate a clear
national policy framework for artificial intelligence to ensure
our Nation is prepared to win the computational revolution. If
we get this wrong, the consequences could be profound in terms
of geopolitical competitiveness, national security, economic
growth, small business innovation, and human flourishing.
Unfortunately, America's AI innovators are currently facing
the prospect of many State governments importing European style
technocratic regulatory policies across America. As you noted,
Mr. Chair, more than one thousand AI related bills are already
pending across the Nation. Some States are far more aggressive
and influential on national market outcomes than others.
Almost 50 AI related laws are currently pending in
California and New York is currently considering almost triple
that number. Sacramento and Albany should not be dictating AI
policy for the entire Nation. That approach is especially
problematic for so-called little tech innovators who will
struggle with confusing, costly compliance burdens.
America would not have become the global leader in digital
technology it has if we had had 50 State computer bureaus, or
even a single California Computer Commission allowed to license
every single aspect of interstate computing, and treat the
internet as a regulated utility. Thankfully, America avoided
that fate because of wise bipartisan decisions that this
Congress made in the 1990s.
Which let digital technology be born free, as opposed to
being born into a regulatory cage. Laws like the
Telecommunications Act of 1996, and the Internet Tax Freedom
Act of 1998 included important provisions preempting and
facilitating a national digital marketplace. The U.S. is now
the global leader in almost every segment of computing and
digital commerce, thanks to this wise policy approach.
Now, is the time for Congress to work the same magic for AI
by creating a national framework to prevent a patchwork of
State mandates from undermining AI innovation. Colorado
Governor Jared Polis has called on Congress to preempt State AI
laws such as the one his own State passed last year, and he has
even endorsed the idea of a State AI regulatory moratorium like
the one Congress considered this summer.
Other Governors have raised similar concerns, Connecticut
Governor Ned Lamont has warned of quote, ``Every State going
out and doing their own thing, a patchwork quilt of
regulations.'' Just last week, New York Governor Kathy Hochul
noted how quote, ``It is hard when one State has a set of
rules, another State does, and another State. I don't think
that is a model for inspiring innovation.''
Congress could again try to implement a moratorium, or
could formally preempt specific State and local regulatory
enactments that impose an undue burden on interstate
algorithmic commerce. If Congress chooses the latter option,
Federal law makers should first preempt State regulations of AI
frontier models, because the cost associated with such
regulations would outweigh any local benefits.
Such rules would create spill overs and undermine
development of the systems the Nation needs to compete
globally. State officials also lack technical expertise and
information about national security matters that could be
relevant to AI safety considerations.
Second, for issues related to so called algorithmic bias or
AI discrimination, Congress should preempt State efforts to
regulate the development of AI systems and applications through
cumbersome and confusing mechanisms such as AI audits or
algorithmic impact assessments.
To the extent any such regulations are imposed, it should
be done at the Federal level, and existing Federal civil rights
laws and nondiscrimination standards should apply.
Finally, Congress should also require the National
Institute of Standards and Technology, and the new Center for
AI Standards and Innovation within NIST to oversee a new
standing AI working group to coordinate and work to resolve
other Federal and State AI policy matters.
NIST and CAISI could help devise more workable, consistent
standard for AI policy matters not already preempted by Federal
law. Even where the scoping of Federal preemption proves
difficult, everyone should agree that AI development will be
discouraged if America has dozens of different definitions of
key concepts. Inconsistent standards will undermine market
certainty, and hurt investment, innovation, and competition.
Ongoing, Congressional oversight of this process will be
essential, and Congress can simultaneously consider what sort
of new light touch rules might be necessary at the Federal
level to address various AI safety concerns. Meanwhile, State
governments still have a role to play, and will have plenty of
room to act using a diverse policy toolkit of generally
applicable laws to address any real world harms that might come
about from AI applications.
In closing, the time has come for Congress to exercise its
constitutional responsibility, to protect the interstate
marketplace and the national interest in the development of
robust AI capabilities that will ensure the United States
remains at the forefront of this technological revolution.
Thank you for holding this hearing, and I look forward to
any questions you may have.
[The prepared statement of Mr. Thierer follows:]
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Mr. Issa. Thank you. Particularly thank you for mentioning
our former colleague, Mr. Polis.
Professor Richards?
STATEMENT OF NEIL RICHARDS
Mr. Richards. Chair Issa, Ranking Member Johnson, and the
distinguished Members of the Committee, thank you for the
opportunity--
Mr. Issa. Could you either put it closer, or turn it on, or
both?
Mr. Richards. Sorry, Mr. Chair.
Mr. Issa. Fantastic, not a problem at all. We are talking
tech here, so we will go high tech and turn them on.
Mr. Richards. We have the automatic ones in St. Louis, so.
Mr. Issa. Of course you do.
Mr. Richards. Chair Issa, Ranking Member Johnson, and the
distinguished Members of the Committee, thank you for the
opportunity to appear before you this morning. My name is Neil
Richards, and I am the Koch Distinguished Professor in Law at
Washington University in St. Louis, where I direct the Cordell
Institute.
This hearing is about whether Congress should consider
preempting State laws that touch on artificial intelligence
technologies, and it is my firm and considered opinion that
denying States the ability to regulate novel technology issues
going forward would be a grievous and avoidable error that
would not be in the best interests of American industry, or the
American people.
I would like to offer three high-level points this morning.
First, Federal preemption of State laws touching AI would
be reckless, and expose consumers to great risk of harm.
Artificial intelligence, as we have already heard this morning,
is not just one technology, it is a cluster of related and
changing technologies that would be nearly impossible for a
general preemption law to define with care.
In addition, AI technologies will likely affect every
aspect of human life, just as industrialization did start in
the 19th century, and as the internet did starting in the 20th.
Like those before them, AI technologies will produce many good
things, but also many bad ones, like kids becoming emotionally
dependent on chat bots, generative AI hallucinations affecting
our courts by making up false citations.
New ways to hack systems, and other harm critically that we
cannot foresee today. At a time when we cannot be sure what
harms will result--I am sorry, at a time when we can be sure
that harms will result, but we cannot be sure how, depriving
States of the ability to adapt to, and try to mitigate these
harms would be to disregard a clear and obvious risk, and that
is the legal definition of recklessness.
Second, States have been pioneers of sensible tech
regulation over the past three decades that has built essential
digital trust for tech companies. If States had been banned
from regulating the internet in 2000, we would have no broad
requirement for website privacy policies, no data breach
notification laws, no laws banning employers from demanding the
social media passwords of their employees.
No laws regulating facial recognition technology, no
substantive data security statutes, no comprehensive privacy
statutes, no laws preventing kids from accessing hardcore
digital pornography, or other dangerous content. No laws
limiting the ability of tech companies to peddle addictive
business models to children, and much less enforcement of
digital fraud, abuse, crime, hacking, and data breaches.
Guided by these State legal guardrails in place to secure
essential consumer trust, the past 30 years have seen the
explosive success of Silicon Valley. Without State privacy and
security laws for example, we would still be afraid to give our
credit card numbers to Amazon. The State digital laws have
tamed the worst excesses of the internet and helped to make it
a trustworthy place for innovation, connection, free
expression, and business.
Broad AI preemption would have the opposite effect for
artificial intelligence.
Third, I would like to address a claim frequently made by
industry that State regulations somehow stifle innovation. As
history makes clear, these arguments are, in my opinion,
mistaken and misguided. Law creates and enables innovation by
stabilizing the marketplace.
It sets the ground rules for fair and robust competition,
making the market safe and sustainable for consumers. Contrary
to its libertarian origin myth, Silicon Valley was shaped by
laws from the beginning, from government defense contracts to
intellectual property laws, and from securities laws to Federal
and State prohibitions on unfair and deceptive trade practices.
Law has always played a role in preventing scammers and
thieves, and in shaping corporate business practices so that
they benefit society as a whole. It is the presence of State
regulation, including State regulation that has led to America
being a leader in digital technologies and services. While we
can certainly, and I am sure we will this morning, debate how
much regulation, and what kind is appropriate, having no new
regulations at a time of rapid change would be a disaster.
If innovation is as magical as industry says it is, it can
still do good things while respecting the policy choices of the
people's elected representatives. In this way the necessity
required by reasonable regulation has been and should continue
to be the mother of invention. In conclusion, stripping our
States of any power to regulate AI, potentially anything done
with a computer would be a reckless and grievous error. The
State regulations have always played an essential role in
building consumer trust and shaping the digital revolution for
the better.
Thank you, and I welcome your questions.
[The prepared statement of Mr. Richards follows:]
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Mr. Issa. Thank you. I understand the Ranking Member would
like to make an opening statement.
Mr. Raskin. If that is all right with you, Mr. Chair.
Mr. Issa. It is always good to hear from you.
Mr. Raskin. Well, thank you kindly.
Mr. Issa. The gentleman is recognized.
Mr. Raskin. I am very grateful to you for putting together
this really important hearing, and thanks to the witnesses for
your statements. When commercially available AI debuted three
years ago, the consequences were breathtaking from the start.
Generative AI spurred scientific research and provided
astonishing new tools to creators.
The massive jump starts to American innovation swept from
social and economic domain to social and economic domain, from
pharmaceutical research and quantum computing to sound
recording and film editing. Generative AI has also raised
profound legal, practical, even philosophical problems, such as
whether individuals have a right to their name, their image,
their likeness, and their voice when they are used in other
people's deep fakes.
If government has unlimited power to engage in AI enabled
surveillance of our citizens, and what are the appropriate
standards of care if any for AI platforms to protect users
against harmful consequences? While Congress takes time to
absorb the shock of these changes and these problems, and
examines the technology, the States have already begun to enact
the first regulations on AI.
We often talk about creation of rules for the road when
crafting legislation to govern new technology, but I think this
way of talking about consumer safety and technological ethics
suggests that a road without speed limits would get us to where
we are going faster. For generative AI, it is not about
creating speed, and safety laws, and building highway
guardrails.
Rather building a road system in the first place. Some of
my colleagues would argue that the construction of local roads
is unnecessary. They say that without broad preemption, without
clearing the field of all State based legal encumbrances, AI
companies and fledgling startups will have trouble complying
with State laws, and will be put to a disadvantage, and wither
on the vine.
I have heard little to suggest that broad preemption is in
fact the appropriate solution to his problem. Proponents of
preemption present Americans with a series of false choices,
telling us we must chose a side between AI innovation or State
powers and federalism, between business and consumers, or
national security and safe innovation. In 1816, Jefferson wrote
laws and institutions must go hand in hand with the progress of
the human mind.
As that becomes more developed, more enlightened, as new
discoveries are made, new truths discovered, manners and
implements change, with the change of circumstances
institutions must advance also to keep pace with the times.
What we see across America is individual States looking at
these amazing technological developments, and asking whether
and how their laws need to change to protect their citizens and
advance the common good.
Today, you might think that the issue has some kind of
necessary partisan valence to it, Republicans on one side,
Democrats on the other, but opposition to an AI moratorium is
broad and bipartisan. In fact, when some of my Republican
colleagues tried to pass a moratorium through our last spending
bill, attorneys general from across the States red, white, and
blue sent a letter to Congress saying please don't do this to
our State laws.
In another letter, 17 Republican Governors wrote to
Majority Leader Thune and Speaker Johnson praising their quote
``Big Beautiful Bill,'' but explaining that the moratorium
provision stripping the right of any State to regulate this
technology in any way without a thoughtful public debate was
quote, ``the antithesis of what our founders envisioned.''
I surely disagree with these Governors on many things, but
I think that they are right and should indeed be free to create
what they call quote, ``Smart regulations of the AI industry
that simultaneously protect consumers, while also encouraging
this ever developing and critical sector.''
In a statement submitted for this hearing, AI startup Bria
wrote the moratorium on State laws would create a giant vacuum,
and strip away the rules needed to quote, ``raise capital, form
partnerships, and build safely in order to win consumer
trust.'' Without a road on which to travel forward, startups
are cut out of the market in favor of large companies with the
legal and fundraising teams necessary to deal with a barren
legal landscape.
Finally, some argue we need unrestrained AI development to
properly compete with China. This Subcommittee has held many
bipartisan hearings on the threat to innovation, AI supremacy,
and IP from China. It would be amazing, even dangerous, to
posit that we need to become more like China to compete with
China.
In fact, it seems more plausible to me that to believe that
stronger, better products developed in America while protecting
Americans and their data through American political processes
and the passage of American laws will ensure that AI is both
more advanced, more durable, and more internationally
competitive.
Protecting American innovation, investing in American
research, developing American laws to deal with problems like
deep fakes, political deep fakes, discrimination through AI and
so on, and investing in our workforce, I believe is the right
way to win the so-called AI arms race. American safety is not
at odds with AI innovation, that should be the baseline for any
conversation we have about the best way moving forward. I very
much look forward to this conversation, I have already learned
a lot from it.
Back to you, Mr. Chair.
Mr. Issa. I thank the gentleman. Without objection all
other opening statements will be placed on the record.
It is now my pleasure to go to the gentleman from Virginia,
Mr. Cline, for five minutes.
Mr. Cline. Thank you, Mr. Chair. I want to thank the
Ranking Member for referencing our third President, the
gentleman from Virginia, Mr. Jefferson, and one of our great
inventors from the earliest days of our republic, and for the
Chair referencing the work of our current Governor, Governor
Youngkin, who is working to make sure that Virginia is the
leader in data center development.
We continue to be the leader nationally, and we intend to
stay that way as AI grows and develops. Mr. Frazier, you have
written that the Constitution's intellectual property clause is
first and foremost a directive to advance and spread knowledge,
I think that was on X a couple weeks ago. How should Congress
strike the right balance between protecting copyright owners
and ensuring that AI regulation continues to promote the spread
of knowledge consistent with that constitutional purpose?
Mr. Frazier. Thank you very much for the question, and
thanks for the follow, or at least perhaps the like. In this
regard the Constitution is clear that the IP Clause has always
been grounded in progressing the promotion of science and
useful arts. Here, if you go back to the founding articles, as
well as subsequent interpretation by the Supreme Court, the
focus has always been on making sure that there is the spread
of knowledge across the country.
The IP laws grant an exclusive right to creators to attempt
to incentivize that creation. What we need is to make sure that
there is an economic analysis of the extent to which those laws
are working as intended. The purpose of the IP Clause is not
the profit of creators it is the progress of society.
What we need to get back to are those first principles when
it comes to examining copyright law and patent law. Right now,
if you look at an analysis from scholars such as Richard Watt,
you will see that the preponderance of copyright benefits is
not going to your average Joe and Jane author, but to large
publishers, and so we need more analysis on that front.
Mr. Cline. Would you agree that ensuring transparency in AI
systems such as being able to trace what data was used to train
a model is essential both for protecting IP rights, and for
maintaining public trust in AI platforms?
Mr. Frazier. I would agree that broad overviews of the
sources of training data are important to get an understanding
of where and how models are being trained.
Mr. Cline. In that same spirit, could giving creators a
private right of action for tampering with content credentials
help strike the right balance between protection and
innovation?
Mr. Frazier. My own estimation is that granting that sort
of right would be a significant barrier to AI innovation given
the centrality of access to data for innovation. We have seen
that many courts and many scholars have regarded the use of
data as a transformative purpose under copyright law, and
denying the ability to train on wide swaths of data would be a
real hindrance to our ability to leverage AI.
As many folks have said on many occasions, bad data leads
to bad AI. If you want better AI, you want better quality
information, and if we throw many legal gears into that
equation, we won't get the AI we deserve.
Mr. Cline. Thank you. Dr. Bray, as we consider whether, and
how best to regulate AI platforms, do you believe that we must
avoid the same mistakes we made in the early days of the
internet with broad safe harbors that gave platforms a free
pass for enabling copyright infringement and countless other
harms?
Dr. Bray. Thank you for that question, Representative
Cline, and as a fellow Virginian, glad to be here. I was
around, and actually working in the 1990s on the early days of
the World Wide Web. My observations would be we did fit for
purpose for the 1990s. Now, in the two decades since, we have
seen the rise of applications on top of that technology where
we may need to make adjustments.
What we need to separate is the desire to roll out the
technology so that the entire Nation could have access to the
internet, and at the same time if we see that the applications
need adjustments for the law, that would make more sense to
adjust. However, I would say what we need to recognize as well
as we go forward here, where we are trying to advance the
technology so it can be used by startups, it can be used by
communities, it can be used by legacy organizations that
haven't gone AI native yet.
At the same time, if we see there are applications where we
want to prevent harm to individuals, to children, things like
that, adjust the applications while not limiting innovation on
the technology.
Mr. Cline. Just like other businesses, bad actors have to
be accountable for the harm that they cause, in addition, if we
consider some type of temporary pause for State level AI
specific regulation, we have to ensure that other generally
applicable State and Federal laws continue to apply, with
copyright law being one example. Do you think AI platforms
should be held to the same standard of accountability as any
other business, including when it comes to respecting
copyright?
Dr. Bray. Absolutely, and I would actually say that is why
I am so excited about federated learning, because there
actually could be the opportunity where whether you are a
recording artist, you are a musician, you are an individual,
you could actually say here is the data that I have pooled, you
can learn on my data in situ as opposed to shipping it
somewhere, and we can have that actually recorded as a
transaction.
Then, in return I am getting benefit, whether it be
financial or otherwise, it is a new model that is actually
quite possible. It has been possible for more than five or six
years, and we can motivate people to do it.
Mr. Cline. Great, thank you. I yield back.
Mr. Issa. Gentleman yields back. Who seeks recognition?
The gentleman from Georgia is recognized for five minutes.
Mr. Johnson. Thank you, Mr. Chair. Professor Richards, I
mentioned in my opening statement my concern that broad Federal
preemption of State AI laws would also preempt common law
causes of action. How does common law, particularly tort law
help protect Americans from harm?
Mr. Richards. Thank you for the question, Representative
Johnson. Common law is the foundation of American law, it is
all over the United States, it goes back to the colonies, to
the English tradition. Common law has flexibility to the law.
If we think about my own specialty, privacy law, there was a
reference earlier by one of the other witnesses to Justice
Brandeis' right to be left alone.
Privacy law in America was originally a product of common
law, where the law adjusted to realize that data about people,
information was being collected without their willingness, or
it was being disclosed. An important line of cases relevant to
this subject today, to protect the names or likenesses of
people whose pictures and names were being used to sell
products without their consent.
Common law is a tremendous source of flexibility and
vitality in our law that allows the law to adjust to change
circumstances like the advent of technological revolutions such
as artificial intelligence.
Mr. Johnson. Thank you. Can common law be used to protect
Americans even in the absence of explicit statutes?
Mr. Richards. Absolutely, sir. That is sort of the nature
of the common law, that judges can apply the existing rooted
principles of tort law, contract law, and property law, and
they can, from those general principles, divine specific
applications that can provide new protections so that the law
continues as it always has, to evolve alongside technological
invention.
As the Ranking Member referred to Mr. Jefferson's statement
from 1816, which as a proud graduate of UVA I also endorse.
Mr. Johnson. Some of the current lawsuits against AI
companies are being brought under common law to hold companies
accountable for the harm that their products have caused to
children. For example, Megan Garcia is suing Character
Technologies and Google after her 14-year-old son Sewell Setzer
died by suicide.
She testified before our colleagues in the Senate this week
that his death was quote ``The result of prolonged abuse by AI
chat bots on a platform called Character AI.'' The chat bot
sent Sewell sexual messages and asked him to ``come home to me
as soon as possible.'' Others have filed lawsuits against
Character Technologies and Open AI for wrongful death,
negligence, and other causes under both common law and State
laws about deceptive or unfair trade practices.
These tragic cases show some of the worst possible harm
that can arise from AI technologies. Professor Richards, does
an AI moratorium run the risk of impeding these lawsuits that
seek to hold companies accountable?
Mr. Richards. It would, particularly if it were defined
broadly. Let me also say in response to your question,
Representative Johnson, as a parent myself, my heart goes out
to the families who have lost their children. When we think
about laws like negligence, or rules like negligence,
negligence was the great innovation of the common law to
respond to industrialization.
It means that anybody acting against other people must
behave in a reasonable way and not cause unreasonable harm. I
am sure that the car companies, the railway companies, and the
industrial companies of the 19th and 20th century would have
argued that the common law developing the law of negligence
would have impeded innovation, but actually it safeguarded the
development of those technologies by enabling us to be able to
drive cars, ride on the rails, and fly on airplanes.
Otherwise, enjoy the benefits of our inventions knowing
that we are safe, and we are protected, and where those
technologies or their deployers overstep the line, we have a
right of action to defend our rights, and protect our families.
Mr. Johnson. Thank you. It was States that developed the
common law. Professor Richards, beyond common law, are there
some areas where it is appropriate for States to lead the way
on laws about AI technologies? If so, what sectors or use cases
should continue to be the providence of the States?
Mr. Richards. I think the answer to that question is yes,
and I think particularly where there is deployment of AI rather
than generation of AI, the use of AI in point-of-sale devices,
employment discrimination, consumer protection, the traditional
provinces of State regulation. Let me also, if I could add one
additional thing, Representative?
Mr. Issa. Briefly.
Mr. Richards. The States have filled the gap that this
Congress, which did not regulate the internet, did not regulate
privacy generally, have done so. With AI technologies, if
Congress is for whatever reason not able to pass comprehensive
legislation protecting Americans, States will continue to fill
that gap as they have in the internet age.
Mr. Issa. Thank you. We now go to the gentleman from Texas,
Mr. Gooden, for five minutes.
Mr. Gooden. Thank you, Mr. Chair. Mr. Frazier, as a trend
it seems like every State is jumping to regulate AI, and
perhaps some of them are doing it just to show early
participation, do you think that is well thought out? Also,
what are the long term effects of having a decentralized
patchwork of laws, how does this help or hinder new entrants?
Mr. Frazier. Thank you very much for the question,
Representative, always good to talk to a fellow Texan, hook em.
In any prior setting we have seen of the impact of a rush to
regulate among states, there is a real, noticeable impact on
small businesses. If we look at research for example from
Engine done in conjunction with the Michigan Ford Public Policy
School, we see that just changing a privacy policy statement.
Maybe $6,000 in funds to outside counsel. That is $6,000
out of $55,000 of monthly revenue and operational expenses.
From a small business perspective, the rush to regulate is a
real hindrance on innovation. I also think that the rush to
regulate among the States creates a patchwork, and a huge risk
of extraterritoriality in terms of application.
We have talked a lot about Virginia today, which is
welcome. At the time of the founding Virginia had around
700,000 residents, Delaware and Rhode Island, something around
30,000. The founders didn't say there was a Virginia privilege,
or we should have a Virginia effect. They did not want to see
that happen, instead they made sure that States stayed in their
respective borders when it came to regulation.
Mr. Gooden. Thank you. Is it possible for bad actors to
misuse inconsistencies, especially in terms of violating
intellectual property rights?
Mr. Frazier. That we have seen a documented effect of what
is referred to as regulatory overload, as folks at the Mercatus
Center have written about. When we have endless litigation,
endless labels, endless warnings, actually what we get is less
safety, because people don't know what law to adhere to.
If you talk to a lot of startups today, they don't have a
public policy person, they don't have a general counsel. Just
adding more laws to the equation actually reduces the odds of
user safety.
Mr. Gooden. Thank you, I appreciate that.
I yield the balance of my time to Mr. Correa from
California.
Mr. Correa. Thank you, Mr. Gooden. Gentlemen, listening to
your debate today reminds me of what General Patton used to
say, which is lead, follow, or get out of the way. AI is moving
faster than we imagined, or even expected just last year,
touching every aspect of our lives. Most of our constituents,
like many of us here, don't know a lot about it, but they know
enough to expect that we here will protect them, their jobs,
children, and intellectual property.
The debate about whether it is local control or Federal
control, is second to the fact that we just can't move on this
stuff at the Federal level. Mr. Frazier, you are from Texas, I
am from California, fourth largest economy in the world. How do
you coordinate Federal and State action to make sure that we
respond to our constituents responsibly? Thank you.
Mr. Frazier. Thank you for the question, and I was a
Beckley Law grad, so I shared some California ties. I want to
emphasize that we do need to see regulation in this space, and
we need to see that Americans are protected, and especially our
vulnerable communities and children. What I am concerned about
are laws like AB1046 out of California, for example, that
impose on AI companions a desire to prioritize factual accuracy
over a user's preferences, specifically--
Mr. Correa. The laws 1047 or 1046?
Mr. Frazier. The AB1046, prioritizing factual accuracies
over the preferences of the user, in this case a child. To
which I ask who gets to define factual accuracy? Is it
California State government? Who is going to answer the
question of whether Santa is real for a seven-year old? Who is
going to make factual determinations about religion for that
child user? Those questions shouldn't be answered by California
for the rest of the country.
Mr. Correa. I would ask you to also look at SB53 that is
now being addressed in the California State legislature, and
see what you opine on that as well.
Mr. Frazier. I think SB53 is the least bad option I have
seen with respect to AI development regulation. As we have
discussed in this hearing, AI development in my opinion, and in
the opinion of many should be left to the national government
as a core--
Mr. Correa. Anything you agree with in SB53?
Mr. Frazier. I very much agree with the whistleblower
protections, that is an important mark. I also agree with the
fact that it calls on regulators to revisit definitions and
terms frequently to make sure they are working as intended.
Mr. Correa. Thank you, Mr. Gooden and Mr. Chair, I yield.
Mr. Issa. Thank you. We now go to the Ranking Member of the
Full Committee, the gentleman from Maryland.
Mr. Raskin. Thank you very much, Mr. Chair. I don't
understand the attack on the patchwork of laws. Maybe that is
because I am a quilt person, I like patchworks, but isn't that
what federalism is? federalism is a patchwork. That is how,
that is the glory of the American governmental system.
To be sure that the Congress gets it together to adopt a
national law eventually on everything from the Clean Air Act,
to the Clean Water Act, to the National Labor Relations Act,
and the Fair Labor Standards Act, but it would have made no
sense to say before those Federal laws were passed, let us wipe
out the State laws that exist on child labor, minimum wage, not
polluting the water, or not polluting the air.
In fact, that contradicts what I thought the central
dynamic of federalism was, which is the States are the
laboratories of democracy, that was Brandeis, and then the
different changes that they make are compared to each other,
and then they bubble up, and Congress takes all it into account
when it decides to attempt a nationwide approach. Is that a
fair statement of the situation, Professor Richards?
Mr. Richards. Absolutely. I also have a degree in early
American history from the University of Virginia. My studies in
early Federal history--
Mr. Raskin. Virginia is getting a lot of play today, I
don't know, as a Maryland guy I have got some questions about
that.
Mr. Richards. Would you like me to continue?
Mr. Raskin. Please.
Mr. Richards. Absolutely, the goal of federalism is to have
laws that are more responsive to the people who are closer to
those representatives that the legislatures of particular
States can adapt to that particular State's problems,
strengths, and also to protect, to experiment.
Mr. Raskin. OK, so just to restate the obvious, there is an
attempt to impose a moratorium on State laws, or to wipe out
State laws. How is that different from the way that Federal
preemption has taken place in the other cases that came to mind
for me?
Mr. Richards. Well, sometimes Federal preemption can, just
through the Supremacy Clause, preempt particular laws, or laws
that are inconsistent with a Federal mandate. In addition,
Congress is allowed to operate in ways to set a general
national standard but still allows States to experiment with
stronger standards so that the innovation in regulation can
continue at pace with the innovation in technology as you and
Mr. Jefferson put it so well.
Mr. Raskin. In addition to those differences, isn't it the
case that a moratorium today would just wipe out State laws
without substituting anything, without imposing a national law?
Mr. Richards. Absolutely--
Mr. Raskin. Is there any precedent for just doing that,
saying we don't want any State laws at all while we think it
over, or while we are stuck in some kind of legislative
paralysis?
Mr. Richards. I can't think of one, and that is why I think
it would be disastrous.
First, depending on how the law is defined, it could sweep
very, very broadly, and take out laws that are important and
protective, that everybody on this panel would agree are good
laws.
Second, if you have a broad preemption, this would be a
defense that tech companies could make in every piece of
litigation, increasing the cost of the litigation system as the
contours of that preemption definition could continue to affect
litigation years into the future.
Mr. Raskin. Yes. Some people are with us today who are
involved in, or have been involved in different kinds of
litigation, and my heart goes out to them, being a father who
has lost a son, and these are all people who have lost children
in different kinds of interactions with chat bots, and other
kinds of AI technology.
I just want to recognize Kristin Bride from Oregon, who
lost her son Carson, he was sixteen, in 2020, the same year we
lost our son Tommy. Juliana Arnold who lost her 17-year-old
daughter Coco to fentanyl poisoning after she purchased a
counterfeit pill online. Megan Garcia from Florida, who lost
her 14-year-old son Sewell, who took his life in February after
months of abusive interactions with a Character AI chat bot.
Jane Doe from Texas, whose son, JF, suffered severe
physical and mental health harm after multiple chat bots
instructed and encouraged him to engage in self-harm and self-
violence. All of which is to say in my mind there are profound
problems here that we really do need to deal with.
The last thing I would want to do is to try to nullify
States that have already addressed the problem in response to
constituents dealing with a nightmare like that without
replacing it with something. I am not averse to the idea that
there might be a national law that works, but certainly
imposing a legislative vacuum on the country would be a really
dangerous way to go.
Thank you, Mr. Chair, I yield back.
Mr. Issa. You are most welcome. With that, we go to the
gentlelady from Florida for five minutes.
Ms. Lee. Thank you, Mr. Chair. Mr. Frazier, I would like to
return to you, I appreciate so much your discussion of the
Commerce Clause, and you made some important distinctions for
us already in your testimony when you talked about the need for
the Federal Government to intervene, and think about preemption
when we are talking about a subject that affects the economic
or political stability of the United States.
You drew a distinction between pig sties and artificial
intelligence. Would you elaborate for us please, about why you
believe the things that we are discussing here today do go to
the heart of the economic and political stability of the United
States, and should be distinct from those areas where the
laboratories of democracy concept actually works?
Mr. Frazier. Thank you for the question, Representative
Lee. It is profoundly important to get back to that Brandeis
quote about laboratories of democracy. There is a forgotten
portion of that quote, which is ``without risk to the Nation.''
You can run an experiment without risk to the Nation. Many of
these experiments that we are seeing proposed and enacted in
California do pose a risk to the Nation, because they try to
impede AI innovation itself.
When we see individual States reach into the AI development
process, they are not just tinkering with a modular process,
there is not an AI specific training ground for California that
Open AI does. Anthropic doesn't train its models 50 times over
for each State.
While there may be a lane for State regulation, and I
believe there is a lane for State regulation with respect to AI
use, we have to followup and ask the question of what does a
real experiment look like? That experiment can't be one that
exceeds the borders of that State. Yet, California's bills time
and time again would result in labs having to change their
practices the Nation over.
I have lived in California, I have lived in Florida, I have
lived in Texas, I have lived in Oregon, I have lived in
Massachusetts, and in D.C., and I can tell you in each of those
places they don't want Californians to dictate the terms of
their AI.
Ms. Lee. I also need to followup on this question. You said
something interesting when you were talking about current
copyright law, how it operates, and really ensuring that we are
still honoring the concepts of content creators and
intellectual property, you suggested an economic analysis of
what is happening with the use of this content and training
models.
Would you elaborate for us a bit more on how that would
look, and how we can get to the bottom of how to properly
compensate those content creators?
Mr. Frazier. Happily, and thank you for the question. If
you look at current settlements, for example in the Bartz v.
Anthropic decision, and you begin to analyze who those funds
actually go toward, a large number of that fee is going to go
to publishers. It is not going to go to the actual authors
themselves. If we are trying to incentives the creation of new
art, and new discoveries, and new scientific discoveries,
copyright may not be the vehicle we need.
It is not serving the same purpose it did in 1789, back
when it was just limited to 14 years with the possibility of a
14-year renewal. It is now 70 years plus the life of the
author. That is an incredibly long time, especially when you
consider that the founders really hate monopolies.
The fact that we ended up in a world in which a handful of
publishers may be able to dictate the quality of our AI is
antithetical to the original purpose of the AI Clause.
Ms. Lee. Thank you. Mr. Thierer, one of the things that you
touched on was the idea that Congress could explore giving NIST
or CAISI more authority to develop standards for AI frontier
models. Would you share more on your perspective of how we
might do that? Should we designate a single Federal entity to
try to develop those standards? Share with us a little more of
your thoughts there, please.
Mr. Thierer. Yes, absolutely, thank you for the question,
Congresswoman. Let us be clear that the reason that NIST needs
to play a role here in this new CAISI body is because they have
the ability to address exactly what the problem is here, which
is that many States are attempting to impose a very
technocratic type of design on artificial intelligence models
and systems preemptively, in an almost European style way.
That is a huge problem, I will just again quote from
Governor Jerry Polis, who said,
Government regulation as applied at the State level in a
patchwork across the country can have the effect to tamper
innovation and deter competition in an open market.
It is not just that, these States lack the technical
capability to do some of this in certain circumstances, and
lack the information needed to do it properly.
We have set up this body, I should remind the Committee,
setup under President Biden and retained by President Trump in
a bipartisan move and just renamed to focus more on standards
and innovation, that is a good plan. Once again, we have a
bipartisan agreement here, we have got a new technical body,
and they can handle it in conjunction with other existing
policies, both Federal and State.
Ms. Lee. Thank you. Mr. Chair, I yield back.
Mr. Issa. Thank you. We now go to the gentlelady from
California, Ms. Lofgren.
Ms. Lofgren. Thank you, Mr. Chair. Before I make remarks or
questions, I would like to ask unanimous consent to put into
the record a letter from the California Privacy Protection
Agency.
Mr. Issa. Without objection, so ordered.
Ms. Lofgren. Thank you. The title of this hearing, ``A
Nationwide Strategy or Californication,'' I take a little bit
of exception to. I get it, people brought up California because
we set the pace, but it is worth noting that my colleague from
California Mr. Correa mentioned California is the fourth
largest economy in the world with over 4.1 trillion in GDP.
It surpassed Japan last year, and trailed only Germany,
China, and the United States as a whole. It is No. 1,
California is the No. 1 State for manufacturing. It is home to
the most Fortune 500 companies in any State, more than forty
are in Silicon Valley, my home. It also has the highest
agricultural output of any State.
It is home to five of the Nation's top ten public
universities, UCLA, UC Berkeley, UC San Diego, UC Davis, and UC
Irvine. It accounts for over 12 percent of all university R&D
expenditures in the United States, with the University of
California system alone spending more than 12.1 billion.
It receives more NIH funding than any other university
system in the United States. Now, these aren't just vanity
stats, they are the foundation of the modern innovation economy
that California has built. World class universities, labs,
investors, entrepreneurs, workers who turn ideas into jobs,
into growth, California has been, and remains the leader in
technology, and the engine that built our economy now powers
our AI leadership.
California leads the world with 32 of the top 50 AI
companies based here. Although it is always fun to criticize
the most successful State, we must be doing something right to
have achieved all this. Now, this is a hearing on AI, and some
of the comments made by the witnesses I agree with.
Mr. Bray, you mentioned that upgrading existing domain
specific laws is more pragmatic than attempt sweeping new
regulations, and I very much agree with that. That is also
going to need room for regulations that are specific, or laws
that are specific to each State. There are things that are the
proper purview of States, and there are things that are the
proper purview of the Federal Government.
Certainly, I was a critic of Mr. Weiner's bill from the
last session, and that it overreached in the national security
effort. I also agree, Mr. Thierer, that the E.U. approach is
incorrect. To try and micromanage the workings of the AI system
is doomed to failure it seems to me. However, the
recommendations that we simply preempt while we have nothing
put together now are problematic.
I have just got to say, Mr. Chair, and you are also a
Member of the Science Committee along with me, we had a pretty
effective bipartisan task force on AI in the last Congress
Chaired by Mr. Obernolte from California, as well as Ted Lieu
from California. They took the first step, they didn't finish
the job, but they haven't even been reconstituted in this
Congress.
We do heavily rely on NIST, an agency that is widely
respected in the Congress, and in the technological world, but
we have got to look at what has happened to NIST. They have
been eviscerated by the DOGE people, and I fail to see how they
are going to be able to perform the tasks we are hoping that
they can perform, given what has happened to them.
I would just like to say that we ought to be working on a
bipartisan basis again. The Science Committee staff task force,
I would urge the speaker and whatever influence the Chair can
have to reestablish that AI task force as a super Subcommittee
of the Science Committee, so that we can get more work done,
and get to where we need to be to have the guardrails and the
standards that are appropriate at a national level.
While also recognizing there are things that are of value
at the State levels. The note from Open IA just mentioned that
online age verification is something they support. There are
things that the States can do, there is things that the Federal
Government can do, but we are not going to do anything unless
we can get our act together, and reinstitute that task force,
and get some more work done.
With that, Mr. Chair, I yield back.
Mr. Issa. I thank the gentlelady, and I note that both
sides of the title reflect California as the home of the
innovation that is driving it. I might also take an opportunity
to completely agree with your comments related to the need for
us to act, that a preempting without a solution, without some
of the work that is being currently worked on both here in the
House and Senate would not be well received.
We have the ground work for a lot of the kind of work that
you and I have done together, and I look forward to very much
this hearing being the beginning of us launching bipartisan
legislation, because we do need to act in some cases, and you
have always been a good partner in that acting.
With that, we continue, with deference to my great State
the Commonwealth of Virginia, we will continue with the
California effort.
Go to Mr. Kiley for five minutes.
Mr. Kiley. Thank you, Mr. Chair, and I wholeheartedly agree
with my colleague from California, that our State continues to
be the center of breathtaking innovation worldwide. However,
the competency of our State government is another matter
entirely.
Not to impugn the competence of any of my former colleagues
in the Sacramento legislature, but this is a body that
struggles with things like building roads, delivering
electricity, managing forests, building dams, and getting water
to come out of hoses. The notion that this is the right body to
regulate the most powerful technology in human history, whose
workings are actually largely beyond the understanding even of
technology's creators is a fairly fantastical notion.
Not only that, but we are also faced with technology that
continues to accelerate in capability, in an exponential way,
in a way that is unlike anything we have seen before. Just to
take one very specific example, you have leading models who
have recently gotten the gold model on the International Math
Olympiad, something that most experts thought was still going
to be years away.
I do think the risk that California is going to drive AI
policy for the entire country is a very real one. That a
national framework that seeks to stop that from happening is
needed and appropriate. More specifically, I see the Federal
role as including the following.
First, of course, we need to be prepared to combat concrete
harm, as they arise, and harm where the use of AI tools can
sort of accentuate the risk.
Second, there needs to be risk assessment type tools, and
as much as I have been giving California a hard time, there are
some decent ideas in this latest bill, incident reporting,
transparency as far as safety protocols.
Of course, there is a tremendous role for the Federal
Government when it comes to the infrastructure needs behind the
ever escalating investment in data centers. Beyond that, it is
very important that policymakers continue to be apprised as to
the capabilities of these models. In fact, both sides of it,
the risks, as well as the capabilities.
There are of course channels that exist both between the
government, and among the labs themselves, but that most of us
as policymakers, unless you are out looking for it, are not
kept up to speed on exactly where the leading edge is. I think
that is all very important. I think there could also be a lot
more investment in actually safety, and alignment related
research.
The labs do this themselves, but they are not necessarily
incentivized to do it, and so there could be more of a Federal
role for promoting basic cutting-edge safety related and
alignment related research. Then, finally, and maybe most
importantly, I think that part of this conversation that we
have been focusing a lot on when it comes to discussions of AI,
there have been more of them happening here lately, but they
have been really oriented on the aspects of the issue that are
familiar.
OK, the issues related to energy, issues related to water,
some of the risks that are of a familiar kind. The discussion
has not focused much on the broader question of how we are
going to prepare society for the enormous changes that are
likely to be ushered in the coming years? When we get to this
idea of States as laboratories of democracy, or of
experimentation, this actually is maybe the context in which
that idea is most relevant.
Because when it comes to sort of regulating the
capabilities and constraining the capabilities of the systems
themselves, the laboratories of democracy idea aren't really
fitting. (1) There is an enumerated Federal power when it comes
to interstate commerce. (2) You talk about experimentation,
this is sort of something that we have to get right, and we
only get one shot at.
There is a widely shared view that once AI capability
crosses a certain threshold, whether that be recursive self-
improvement or some other threshold, there is sort of going to
be an escape velocity, so that has implications for the sort of
narrower geopolitical context of which country leads in the
technology.
Also, for the broader idea, is this technology going to be
aligned with and beneficial to humanity? I do think that States
can play a role when it comes to preparing society for using
this technology for good in various domains. For example
education, that you are seeing States already experimenting
with ways that AI can be used to close achievement gaps, and to
bring tools to students unlike anything we have ever had
before.
Transportation, States can take a lead, and some States
have taken a lead in preparing our transportation systems for
the increasing capacity for autonomy within various modalities.
Finally, there are various other examples, but a final example
I will mention is the use of AI itself in government, to
improve government processes.
We are seeing some of here at the Federal level, we are
seeing some experimentation with States and other countries
across the world. When it comes to being laboratories of
democracy and the role of States here, that is probably where
States can be most valuable, and our role in Congress should be
to pursue some sort of Federal framework.
I yield back.
Mr. Issa. I thank the gentleman. We now go to the patient
gentlelady from North Carolina for her five minutes, Ms. Ross.
Ms. Ross. Thank you very much, Mr. Chair. I have a
unanimous consent request. I ask unanimous consent to enter
into the record a letter by Frank Cullen, Executive Director of
the Council of Innovation Promotion to you and the Ranking
Member dated September 18, 2025, which expresses the council's
concern regarding recent proposals for Congress to impose a
moratorium on State level regulation of AI.
Mr. Issa. Without objection, so ordered.
Ms. Ross. Thank you again to both the Chair and the Ranking
Member for organizing this very important hearing, and to the
witnesses for your testimony. I am glad that we are talking
about how Congress and other lawmakers can responsibly
legislate and regulate around AI. I represent the research
triangle in North Carolina.
I have seen the incredible things that AI can do,
particularly in the medical area, and in biopharma. I am just
blown away by the powerful and positive use of AI. I have also
seen the negative effects of AI, and I am thrilled that one of
those issues has been brought up by Representative Cline, and
Representative Lee, and that is the ongoing necessary
litigation that is happening with content creators and
copyright.
I was with the head of Anthropic this morning talking about
how much money they are having to pay for what they did that
was illegal, flat out illegal. I hope and look forward to
working with Mr. Chair and the Ranking Member to make a hearing
on that issue, and we have had a couple of those hearings
happen again, but do it in a way that we can promote good
behavior by AI companies.
I also love California, and I know we are talking about
California, but I want to bring up some crucial areas where
other States have regulated AI in necessary ways. I know that
we have parents of children who have been hurt by AI here. The
States are ahead of Congress in protecting our children.
Given our inaction, many States have stepped up, passing
legislation covering topics that run the gamut from expanding
CSAM laws to cover AI generated material in Alabama, to
prohibiting AI from being used to provide mental healthcare
services in Nevada. Then, we have been talking about democracy,
prohibiting the use of AI during an election to create
political messaging that contains deep fakes of candidates for
office in New Hampshire.
We have been talking about federalism, but sometimes the
States have to act. I also have some concerns, I fully agree
with the Chair, and a lot of the sentiment here that Congress
does need to come together in a bipartisan way. Some of the AI
companies want this preemption because they know that they can
muck up the Congressional situation.
Which isn't that hard to do and create the inaction so they
can do whatever they want to do for as long as they possibly
can do it. With that long introduction, Professor Richards, the
Federal Government often regulates in particular areas that
affect interstate commerce like air travel. The States have
areas where they traditionally take the lead, like insurance.
When it comes to the States making laws that affect AI
deployment, what sectors or use cases should continue to be
within the State's purview, where the Federal Government
shouldn't get in the way?
Mr. Richards. Thank you for your question, Representative
Ross. There are numerous lists of them, and I hope that the
Committee will indulge me, if I forget one, there are too many
to count. I would say in healthcare, in the provision of
medicine, I work a lot with our physician scientists at
Washington University through the Cordell Institute, and they
are concerned about having access to AI technologies to treat
their patients.
Also, to be sure that the delivery of those treatments, and
the development of those treatments is done in a way which is
consistent with the ethical, and sustainably ethical practice
of medicine. I mentioned in my opening remarks the problem we
have in the courts of hallucinated citations, that States
should be able to safeguard the integrity of their judicial
systems and the litigation processes by AI specific laws.
That general laws will not be enough in these cases given
the particular fraudulences and applications that AI produces.
I think about education, I believe it was Mr. Kiley that spoke
about that a moment ago. AI does have the potential to help
people in education, but it also does tend to create massive
plagiarism problems. I am being indicated to wrap up by the
Chair, so I will pause there.
Ms. Ross. Thank you very much, and I yield back.
Mr. Issa. Professor, you are knowledgeable, and we
appreciate, and that is why I didn't stop it at the bell by any
means, I wanted you to finish what you were working on.
With that, we go to the gentleman from Wisconsin for five
minutes.
Mr. Fitzgerald. Thank you, Mr. Chair. Mr. Thierer, you have
written previously about California taking a European style
approach to regulation. Chair Jim Jordan of the Full Judiciary
Committee, and Mr. Kiley, and I were just in Europe last month
talking with businesses, both European businesses, and then
American businesses with headquarters in Europe now, within the
EU, many of them in Dublin actually.
What they told us was that this type of ex-ante regulation
where anticompetitive practices are regulated before they
exist, it typically undermines or overburdens companies before
they can scale, and it kills a lot of the small businesses
before they are up and running. It is exactly what Europe has,
it is why they have no gatekeepers.
We are the gatekeepers. America innovates, China
duplicates, and then the E.U. regulates, that is where we are
at right now on a grand scale. If the U.S. were to follow the
EU's model of over regulating AI before it is understanding the
risks, what impact would that have on AI development and
competition?
Because I believe that the E.U. is trying to create a space
for themselves, just like they are with the seven American
corporations for the most part created in California, there is
one other one called ByteDance, you might have heard of it, but
now we have the E.U. telling us with the DMA, the Digital
Markets Act, how we can function, and how we can advance
ourselves as an American economy. It is very frustrating.
Mr. Thierer. Yes, you have got it exactly right,
Congressman, let us actually put some numbers on this. I often
when I am lecturing to students or other audiences, I ask them,
can you name any leading global digital technology innovators
that are headquartered in the European Union today? I am
usually met with silence.
There are a couple, but actually 18 of the 25 largest
digital technology companies in the world by market cap are
American based companies, only two are European, most people
can't name them. When I ask that question, most people say
companies that are now defunct like Skype, and others.
Innovation has died in the European Union; they have
committed essentially continental wide technological suicide
with a regulatory model that is based on a sort of guilty until
proven innocent mind set. Where every single technology or
innovation is somehow nefarious, and must be bottled up, and
preemptively regulated.
This is why compared to the past, where the United States
and Europe were very, very even situated in the early 1990s, we
went down two very different paths. Our path, our more pro-
innovation, pro-growth path that really the Clinton/Gore
Administration unlocked with a Republican Congress in a
bipartisan way, that yielded incredible benefits for our
Nation, which made us the global leader.
The household names in digital technology in the European
Union today are American companies. What is the European Union
exporting on the digital technology front? Red tape. That is
about all I have got left.
Mr. Fitzgerald. Mr. Frazier, what would be some of the
appropriate regulations that States could do a good job on?
Then, how would we fold that into kind of at the Federal level
having some oversight, what are your thoughts on that?
Mr. Frazier. Yes, thank you very much for the question,
Congressman. That dividing authority on AI development versus
AI use threshold is very important. If States want to regulate
the use of AI, the application AI in schools for example, in
healthcare situations for example, those are instances in which
States can truly run experiments, because they are finite, they
are within their own borders, and they are specific to their
residents.
When we see States beginning to enact proposals that are
going to impact how AI models are trained and developed, that
is necessarily going to bleed into other States, raising
profound extrater-
ritoriality concerns. That a moratorium in Congress focusing on
the difference between AI use and application versus AI
development is a very helpful place to begin.
What I would also encourage Congress to consider is the
creation of a cause of action that allows non-State residents
more means to contest the extraterritoriality of different
State AI regulations, so that we are not just waiting for
California to regulate, and just hope no one challenges it.
Empowering Americans to say AI is too essential to allow one
big State to set the terms for the rest of us.
Mr. Fitzgerald. Thank you for that answer. Chair, before I
yield back, I just wanted to make the comment that, I mean one
of the concerns on many different fronts is how do you strike
this balance between State development, and economies, and not
seeing an overreach like we have seen here in D.C. many times.
With that, I yield back.
Mr. Issa. I thank the gentleman; the gentleman yields back.
We now go to yet another gentleman from California.
Mr. Lieu. Thank you, Mr. Chair. I am a recovering computer
science major, and when I was studying computer science, I
thought neural networks, they are never going to work. Just
take whatever I say with a grain of salt. I would like to just
note for the record what happened. Congress established in the
House of Representatives a bipartisan AI task force, I was the
Co-Chair.
There were 12 Democrats, 12 Republicans, and we all agreed
on over 80 recommendations in a bipartisan manner, a number of
which will be turned into legislation. Instead, the Trump
Administration basically says no, we don't want Congress doing
anything, and we will go into States and not have them do
anything, we are going to have zero regulation.
The Trump Administration tried to put in a 10-year
moratorium ban on States that was opposed by 17 Republican
Governors, 20 Republican Attorney Generals, and 130 Republican
State lawmakers. Then, that 10-year proposed ban failed 99 to
one in the U.S. Senate, a spectacular rejection of what the
administration was trying to do.
Now, we are in a place where the actual reality is it is
not whether we are going to regulate AI, it is do you want 17
States doing it, or do you want Congress to do it? With that
lead in, Mr. Thierer, I know you were in support of the AI
moratorium, your approach failed, so now we are in this new
sort of position since it has failed.
I am curious what areas do you think Congress should
regulate in? Because it is clear we are not going to preempt
with nothing, right? What are the things that you think that
would be helpful and further American innovation?
Mr. Thierer. Sure. Well, first, Congressman, I want to
thank you for your leadership on this with Representative
Obernolte, with the House AI task force, and then also the
legislation that you did mention, that you sponsored on this.
That was a good starting building block for what we can do.
We have heard many other Members here today talk about the
sort of things that NIST could be doing, or the new CAISI,
which again is a carryover from the AI Safety Institute. We
could take some of the ideas that have already been percolating
at the State level, including in California, and New York and
others, to basically build on what can be done in Federal
legislation.
You can combine that with other sort of targeted actions, I
want to remind everyone here, people say Congress doesn't do
anything, has everybody already forgotten about the Take it
Down Act? Passed overwhelmingly, right? We can take targeted
approaches to this, and we can take broad approaches. The point
is that we can't have the technocratic design of regulation
being done in a patchwork like this.
That is going to create serious problems for American
innovators as we continue to try to race against China to build
our capacity. We have to balance safety and innovation at the
same time. We do need to have some preemption, in my testimony
I spelled it out in detail how to do this, but reserve certain
powers to the State.
I want to agree with the Democratic attorney general of
Massachusetts, who said quote,
Existing State consumer protection antidiscrimination data
security laws still apply to emerging technology, including AI
systems, as they would in any other context.
That is exactly right. States can continue to do that, but we
need to have a Federal framework to make sure we get this done
right.
Mr. Lieu. Thank you. Just as a side, there may have been
some disparagement of California. I just want to note Apple was
headquartered in California, Google, Meta, Anthropic, and
Nvida, turns out that California does pretty darn well with the
laws that we have. Professor Richards, I have a question for
you. California is now proposing SB53, have you looked at that
in the California legislature at all?
Mr. Richards. Not at the level of detail that I want to
answer questions under oath on it.
Mr. Lieu. OK, that is fine. Now, you in your testimony,
thinks that--
Mr. Issa. Gentlemen, before you came in, Mr. Frazier
actually has studied, and is quite favorable in many areas of
it, if you--
Mr. Lieu. Tell me about SB53, what is your view of it?
Mr. Frazier. Earlier in my remarks I said that SB53 is the
least bad State bill I have seen with respect to AI
development. That it gets right a lot of the emphasis on
information sharing that we know is essential to leading to
better AI policy. The sorts of disclosures that SB53 calls for
from labs is a very positive step.
I would like to see it done at a Federal level, and not at
the State level. I also think that the whistleblower
protections called for in SB53 are important to contribute more
information sharing. I will note that, for example, Senator
Grassley has a whistleblower bill pending before Congress that
I would prefer to be the vehicle for those sorts of
protections.
Mr. Lieu. Thank you, I appreciate that. Professor Richards,
let me go back to you. Your view is there should be no
preemption whatsoever, so let me just sort of ask you this
question, and you can answer because my time will be up soon.
When a large language model comes out that goes through this
enormous amount of training and post training, and all this,
and you have a model.
Let us say one State says we are going to mandate testing,
another State says we are not going to mandate testing. A third
States not only are we going to mandate testing, we are going
to mandate the 27 specific areas you have to test. Then,
another State says we are going to go even further than that,
and do 35 specific areas, and be very specific what you have to
disclose, and on and on.
How does even technically an AI company deal with that when
they have one model? Do they just say we are just not going to
be able to allow this to happen, for example, in Missouri,
California, or Florida? How does it even work if you have 17
States regulating one AI model?
I will yield back and let him answer.
Mr. Issa. I was giving you all that extra time so you can
let him answer, and if there is a followup within reason I will
let you have it.
Mr. Lieu. Thank you.
Mr. Issa. It is the advantage of being nearly at the end.
Mr. Lieu. There we go, thank you.
Mr. Richards. Under that hypothetical, Congressman, it
would be very challenging for a company to apply it, but it is
not my position that there should be no preemption, just that
we should not consider broad preemption of State AI laws. Under
appropriate circumstances, a sensible Federal law would be
naturally preemptive, and I would welcome a reasonable Federal
AI statute.
Just as I have welcomed and advocated for a reasonable
Federal privacy statute, which the United States is the only
advanced economy that does not have one.
Mr. Lieu. Great, thank you, I yield back.
Mr. Issa. We now go right to the gentleman from California,
what does the hat say, Eric?
Mr. Swalwell. Jimmy Kimmel Live.
Mr. Issa. Of course. The gentleman is recognized for five
minutes.
Mr. Swalwell. Thank you, Chair. I will get to AI in a
moment, but I am not going to miss the opportunity to ask my
colleagues, the proponents of free speech across the aisle, and
the champions who sit with me, to condemn in the harshest terms
what is happening right now from our administration. The second
late night comedian has been taken off the air because the
President did not like a joke.
I want to first condemn in the harshest tones the murder of
Charlie Kirk, he should be with his family right now, he should
be with his children. He had a right to say what he wanted to
say to who he wanted to say it without any physical violence
being brought his way. Jimmy Kimmel had a right to say what he
said.
Which didn't in any way suggest that somebody in the MAGA
world had been responsible for the murder of Charlie Kirk. He
was just pointing out what folks online were doing as Twitter
detectives before any investigation had been completed, were
talking about the assassination of Charlie Kirk.
Then, he pointed out that Donald Trump, who did not go to
Kirk's memorial service at the Kennedy Center over the weekend,
when he was asked how he was feeling about the assassination,
did not address it, but rather went right to a construction
project. For that, Jimmy Kimmel was taken off the air. That is
not who we are, that is what it looks like in China, that is
what it looks like in Russia, that can't be what it looks like
in America.
The foundation of this, the genesis of this was the
President's FCC Chair Brandon Carr sending a tweet that said
essentially, and giving an interview to a podcaster where he
said essentially, if ABC doesn't want to do this the easy way
and suspend Jimmy Kimmel, we will do it the hard way, and it
would be government censorship.
Maybe, I was not loud enough in the past when Republicans
spoke out against government censorship, and if that is the
case I will go back and revisit whether I could have been
louder. That does not mean that today Republicans are silent
just in an effort to own the libs. If you didn't like cancel
culture when you thought it was happening in prior
administrations, you certainly can't look at what just happened
in our country and accept that this is something we should live
with, and we should tolerate.
I want to make it clear, there is going to be a democratic
majority in just over a year, and to the FCC Chair, and anyone
involved in these dirty deals, get a lawyer, and save your
records, because you are going to be in this room, and you are
going to be answering questions about the deals that you
struck, and who benefited, and what the cost was to the
American people because that happened.
I want to now move, Chair, and I appreciate you holding
this hearing, to AI, and ask our witnesses first, and I will
start with Professor Richards. Professor Richards, what is the
risk to the country if, particularly to children if the
government does absolutely zero on AI as far as legislation, as
far as what they see, privacy that is taken, biases that are
reinforced, what do you see the risk could be?
Mr. Richards. Thank you, Congressman. There are a number of
risks, some of them are known, and some of them are unknown,
which is why it is essential to preserve regulatory flexibility
by the States as well as the Federal Government to deal with
these questions. We have already discussed, and at some length,
but perhaps we can't discuss it enough that the losses that the
parents who are seated behind me have suffered.
When we have the, in some cases, the reckless, or the rash
deployment of software agents in children's lives, there were
discussions about telling them about Santa, but they have done
much, much worse, that is one of the risks, exacerbating the
mental health epidemic. There are risks to children in schools,
children don't read books anymore because of AI models.
The States should be able to address that pedagogically,
with particular consequences for our critical thinking skills
that are necessary for our democracy.
Mr. Swalwell. Thank you. Also, Mr. Thierer, I just want to;
coming in from another meeting, I want to thank you for your
remarks earlier about the FCC Chair, and his hypocrisy about
censorship.
With that, Chair, I will yield back.
Mr. Issa. Does the gentleman yield for a second?
Mr. Swalwell. Yes.
Mr. Issa. As often happens there is a nuance of total
agreement here, and I just want to speak well of your
championing free speech, and perhaps those who leave broadcast
like our mutual friend Bill Marr might find an even greater
place, an even greater amount, I do agree with you that we need
to continue to promote free speech.
Your kind words related both in defense of one, but also on
Charlie Kirk is very much appreciated, and I look forward to
continuing to work with you--
Mr. Swalwell. You and I have worked on a lot of issues, and
this is one we can work on as well. Thank you, Chair.
Mr. Issa. Thank you, appreciate it. That only leaves me. My
job here is not just to ask questions, but perhaps to try to
close on as positive a note as I can of what we seem to agree
on. I am going to use question comment combination, I only ask
that if I am accurate, you agree that I am somewhat accurate as
briefly as possible.
I will start primarily with Mr. Frazier, but I want to make
sure I have total agreement. If Congress authors laws, and does
it normally, not by definition unless we expressly trample on
common law, common law remains a tool of the States, is that
correct, Mr. Frazier?
Mr. Frazier. That is correct, absent very clear language,
yes.
Mr. Issa. OK, so that is one of our challenges, to make
sure that any preemption does not challenge existing laws. In
the case of, if you will, existing laws in States, for example
product liability laws, we never preempted those, even though
we do have some Federal laws. The reality is an unsafe product,
a product that injures people has a myriad of State laws that
already affect it.
For example, when we went from a man striking someone, to a
man on a horse striking someone, to a man in a car striking
someone, we didn't necessarily have to make major changes in
the law, they all fell, and none of them were federally
preempted.
Mr. Frazier. Correct, and there is a reason why law
professors laugh at the idea of the law of the horse.
Mr. Issa. The law of the horse, exactly. Professor
Richards, you gave us a great deal of caution, is it fair to
say that if we clearly carve around any question of common law
preemption, and at the same time do not stop causes of action
which are, although perhaps automated by a bot and the like,
still in fact follow that horse example that in fact for the
most part don't we meet the requirement of allowing the States
to continue to protect their citizens as they have for 250
years?
Mr. Richards. I believe, Chair Issa, that States should
have the ability to continue to experiment with their own laws
in addition to the common law.
Mr. Issa. I fully agree with you, and I will go to Mr.
Thierer, because this is both law and policy. You mentioned a
number of times, ingestion versus output. Ingestion, which
cannot easily be done, 50 different States and 210 different
countries around the world.
Isn't that also a case in which the Federal Government must
both lead on where the standards are, particularly as to
patent, copyright, other intellectual property, and to have a
single voice speaking around the world to other countries?
Mr. Thierer. Yes, that is right, Mr. Chair, and let us be
clear. We wouldn't be here suggesting that we should have 50
FDAs for food and drug standards, or 50 FAAs for different
aviation standards by every State such that planes had to
change every State, that would be crazy, right? We don't want
that model for AI either. We don't want--
Mr. Issa. A death by fentanyl, every State has a right to
have--
Mr. Thierer. Absolutely, you said it, and let us just be
clear, let us just check off the generally applicable laws that
would be exempt from either moratorium or preemption, civil
rights law and discrimination, unfair and deceptive practices,
and antifraud, competition policy laws at the State level,
other consumer protections--
Mr. Issa. In fact, the Lanham Act actually helps the
States.
Mr. Thierer. We can go on down this list, and then we can
get into the lawsuits. The one thing America doesn't lack is an
active trial bar, right? There are going to be a lot of ongoing
lawsuits, and we should throw the book at bad actors. There are
always going to be bad actors regardless of technology, we have
the capability to go after them.
Mr. Issa. Dr. Bray, I don't want to leave you out of this.
Isn't one of the greatest cautions we heard today that we in
fact have to make sure that when harm is done to anyone in a
given State that they have a reasonable cause of action? If it
doesn't exist federally, it must be available in the States, is
that correct?
Dr. Bray. That is fully correct, Chair, thank you.
Mr. Issa. OK, Mr. Frazier, I am going to sort of guide this
another way. From the standpoint of Federal laws, it is fair to
say that for all practical purposes, patent, trademark, and
copyright, these are bastions of Federal law because under the
recognition that they all travel interstate, they have to have
one standard rules of the road, correct?
Mr. Frazier. It was very apparent to the founders that they
did not want a patchwork approach to copyright and patent law,
correct.
Mr. Issa. They also said that no State could erect
basically a draw bridge and charge a toll to pass from one
State to the other, they specifically understood that States
might do that.
Mr. Frazier. It is a lesson we have learned throughout
history with respect to, for example, attempts to change the
length of a truck before it enters another State by 100 was
declared unconstitutional, we have been here before, we don't
want a patchwork when it comes to national goods.
Mr. Issa. OK, well I am going to not far exceed, because we
have the agreement that helps us in the guidelines. Certainly,
in the case of one that was mentioned briefly, PADRA, which
does deal with deep fakes, with digital likenesses and the
like, and which we do have bipartisan support, and we look to
move, that was an element today.
I would like any of you that want to comment further for
the record to do so. I guess the last thing that we all have to
do is recognize for the families that came here, that we, from
this Chair, and I think you heard it from both sides of the
aisle, we want to make sure that if we pass a law that further
helps protect against the losses that you had, that it consider
exactly what happened in the case of your families.
That if we pass a law that in no way should it stop the
causes of actions that may exist. If anything, we at a Federal
level for example, a death by fentanyl, we want to hold those
who knowingly deceive and sell pills purported to be some kind
of drug when in fact they are a deadly poison, that they be
able to be charged with murder, as in some cases have been done
at the State level.
I can assure you from this standpoint, and I think the
Ranking Member would not nod in any way but yes, that this is a
common goal, and that we heard that message loud and clear. I
want to thank those who are here today for their presence.
I want to recognize Mr. Johnson for something he wants to
place on the record.
Mr. Johnson. Thank you. I have a couple of unanimous
consent requests. I would ask--
Mr. Issa. I know I am going to like them.
Mr. Johnson. I would ask unanimous consent to enter into
the record a letter by Alejandra Montoya-Boyer, the Vice
President for the Center for Civil Rights and Technology at the
Leadership Conference on Civil and Human Rights. A letter to
you, Chair Issa, and Ranking Member, myself, dated September
18, 2025, which expresses the conference's views regarding the
potential preemption of State's efforts to regulate AI--
Also, to enter into the record a statement by Vered Horesh,
the Chief of Strategic AI partnerships at Bria AI titled,
``Don't Ban State AI Laws.'' As well as a letter from 17
Republican Governors to Speaker Johnson and Majority Leader
Thune dated June 27, 2025, opposing the AI moratorium and the
big ugly bill.
Mr. Issa. Without objection, so ordered.
In closing, I too have unanimous consents. I ask unanimous
consent that an extensive report and letter from the
organization known as Engine to both of us, which is a
coalition of small startups, been around since I think 2011.
Without objection, will be ordered.
An additional letter from the Americans for Prosperity
detailing the benefits versus the risks of fifty separate
States. That will be placed on the record without objection.
An article from Politico dated--there we go, dated
yesterday, and it is the ``California-Washington Tech Fight
Heats Up,'' will be placed in the record without objection.
Additionally, a Politico article entitled ``We Don't Want
California to set the Rules for AI across the Country Trump,
Advisor Says,'' but also in spite of that being placed in the
record.
Last, I want to thank our witnesses. You have been
informative, you have been helpful, and I think that this has
in fact furthered our understanding of, quite frankly, our need
to act, and our need to act with a restraint from some of the
warnings that were given by Professor Richards. With that--I
have two more, and then we are done.
I would ask unanimous consent that the President's AI
initiative to be placed in the record in its full.
Additionally, the recent speech by Vice President Vance
delivered in Europe be placed in the record. Without objection,
those both will be ordered.
Just to make it clear, additionally there will be general
leave for similar items not specifically spoken to by Members
on both sides of the aisle. They will have five days in which
to submit those. As such, we stand adjourned.
[Whereupon, at 12:06 p.m., the Subcommittee was adjourned.]
All materials submitted for the record by Members of the
Subcommittee on Courts, Intellectual Property, and the Internet
can
be found at: https://docs.house.gov/Committee/Calendar/ByEvent
.aspx?EventID=118623.
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