With Americans increasingly anxious about how AI could harm mental health, jobs, and the environment, public demand for regulation is growing. If Congress stays paralyzed, states will be the only ones acting to keep the AI industry in check. In 2025, state legislators introduced more than 1,000 AI bills, and nearly 40 states enacted over 100 laws, according to the National Conference of State Legislatures.
Efforts to protect children from chatbots may inspire rare consensus. On January 7, Google and Character Technologies, a startup behind the companion chatbot Character.AI, settled several lawsuits with families of teenagers who killed themselves after interacting with the bot. Just a day later, the Kentucky attorney general sued Character Technologies, alleging that the chatbots drove children to suicide and other forms of self-harm. OpenAI and Meta face a barrage of similar suits. Expect more to pile up this year. Without AI laws on the books, it remains to be seen how product liability laws and free speech doctrines apply to these novel dangers. “It’s an open question what the courts will do,” says Grimmelmann.
While litigation brews, states will move to pass child safety laws, which are exempt from Trump’s proposed ban on state AI laws. On January 9, OpenAI inked a deal with a former foe, the child-safety advocacy group Common Sense Media, to back a ballot initiative in California called the Parents & Kids Safe AI Act, setting guardrails around how chatbots interact with children. The measure proposes requiring AI companies to verify users’ age, offer parental controls, and undergo independent child-safety audits. If passed, it could be a blueprint for states across the country seeking to crack down on chatbots.
Fueled by widespread backlash against data centers, states will also try to regulate the resources needed to run AI. That means bills requiring data centers to report on their power and water use and foot their own electricity bills. If AI starts to displace jobs at scale, labor groups might float AI bans in specific professions. A few states concerned about the catastrophic risks posed by AI may pass safety bills mirroring SB 53 and the RAISE Act.
Meanwhile, tech titans will continue to use their deep pockets to crush AI regulations. Leading the Future, a super PAC backed by OpenAI president Greg Brockman and the venture capital firm Andreessen Horowitz, will try to elect candidates who endorse unfettered AI development to Congress and state legislatures. They’ll follow the crypto industry’s playbook for electing allies and writing the rules. To counter this, super PACs funded by Public First, an organization run by Carson and former Republican congressman Chris Stewart of Utah, will back candidates advocating for AI regulation. We might even see a handful of candidates running on anti-AI populist platforms.
In 2026, the slow, messy process of American democracy will grind on. And the rules written in state capitals could decide how the most disruptive technology of our generation develops far beyond America’s borders, for years to come.
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