No Federal AI Rules Yet: What the State-by-State AI Regulation Battle Means for Your Tech Products
The United States doesn’t have any federal law on AI regulation 2026 tech products standards at the moment. Several attempts including through the 2025 budget bill have failed to pass through Congress.
On the 4th of July, 2025, the large budget bill, the One Big Beautiful Bill Act (OBBBA), was signed into law. One of the drafts proposed a 10-year suspension on states from passing their respective AI regulations. The Senate voted against it, and the final law passed by Congress does not stop states from regulating AI.
New Proposals, Same Resistance
There have been two more similar proposals since then. One was added in the draft 2026 National Defense Authorization Bill. The other was in a bipartisan discussion draft called the Great American Artificial Intelligence Act, presented to Congress in June 2026 by Representatives Jay Obernolte (R-Calif.) and Lori Trahan (D-Mass.).
The proposed Bill would suspend states from regulating the development of AI models for a period of three years. They would still be able to regulate how the AI models are used. However, this bill has been met with resistance from both Republicans and Democrats. Analysis by experts suggests that the bill is unlikely to pass this year.
Certain states have taken it on themselves to enforce regulations, resulting in a patchwork of AI regulations for 2026 tech products.
Who’s Regulating AI? A Look at State-Level Laws
California:
Several AI laws in the state came into effect on the 1st of January, 2026. Developers are mandated to go public with their safety plans, report any serious AI concerns to the government, and share the necessary information on the data used in training their advanced AI models. The companies that design AI companion chatbots must explicitly inform their users that they’re having conversations with AI, not a person. They must have safety measures in place to discover any potential case of self-harm from a user.
Also, California’s AI Transparency Act (SB 942), which mandates a compulsory watermark on AI-generated content will come into effect on the 2nd of August, 2026.
Texas:
On the 1st of January, 2026, the state passed The Responsible Artificial Intelligence Governance Act (TRAIGA) into law. Texas AI laws placed a ban on using AI for harmful purposes like subtly encouraging self-harm or creating child sexual abuse material (CSAM). Also, state agencies are required to report whenever they use AI but the state doesn’t have any law for regulating high-risk AI systems.
Colorado:
At the moment, Colorado doesn’t have any active AI law. The original comprehensive AI Act (SB 24-205) has been delayed twice before it was repealed in May 2026. Its replacement, a narrow automated decision-making law (SB 26-189), will come into effect on the 1st of January, 2027.
Can the Federal Government Override State AI Rules?
President Trump signed Executive Order 14365, Ensuring a National Policy Framework for Artificial Intelligence into effect on the 11th of December, 2025. The order gave federal agencies the authority to challenge state AI laws. To sue over state AI regulation, on the 9th of January, 2026, Trump formed a Department of Justice AI Litigation Task Force.
The Trump administration also suggested using federal broadband funding as leverage to get states to remove its AI laws.
On the 20th of March, 2026, the White House introduced the National Policy Framework for Artificial Intelligence. One of the recommendations the framework proposed was encouraging Congress to adopt a national AI standard that would replace the state AI laws that were too strict. But, general consumer protection and child safety laws will remain unchanged.
However, executive orders cannot overrule the state AI laws by themselves. Only courts can enforce what they consider the right option. And until they decide, state AI laws will remain in effect.
Despite efforts by the administration to stop states from introducing more AI laws, as of July 1st, 2026, there have been over 100 new state AI laws enacted this term by more than half of U.S states.
What These Regulations Mean for You
AI laws are different for each state, and because many of the biggest AI companies are either based in California, Texas, or New York, the restrictions and regulations depend on what particular state you find yourself in.
If you’re based internationally, but you use an AI app that’s U.S.-based, the state AI laws in whatever state the company is in define how you can use the app.
Firstly, some chatbot apps will categorically state that you’re talking to an AI, not a real person. In California and New York, these notices are regularly posted because the state AI laws require that they be posted.
Secondly, because of the requirement by some state AI laws, most U.S.-based AI companion apps have built-in safety features for users that may be at risk of self-harm.
Thirdly, because of laws like California’s AB 2013 that encourage AI transparency requirement, some AI companies give full details on the type of data used in training their AI models.
These laws don’t apply outside the U.S. But they will apply in some features if you’re using any U.S-based AI app.
How Top AI Tools are Responding
- ChatGPT (OpenAI): OpenAI is headquartered in San Francisco, California. The company follows California’s SB 53 AI laws on reporting safety concerns and sharing training information for their AI system.
Best for: Everyday AI assistance in writing, coding, voice conversations, and general tasks.
Worth paying for if: You use the app for your daily activities. ChatGPT Plus costs $20 / £14.91 / C$28.1 / N31,500 monthly.
Skip it if: You barely use ChatGPT.
Best alternative: Claude.
- Claude (Anthropic): Anthropic is headquartered in San Francisco, California and because of that, the company follows the state AI laws that require AI companies to go public about their safety practices.
Best for: More detailed writing, editing, and complex reasoning.
Worth paying for if: You frequently handle large files that require detailing. Claude’s Pro plan costs $20 / £14.91 / C$28.1 monthly.
Skip it if: You’re looking for a casual chatbot for regular everyday questions.
Best alternative: ChatGPT.
- Character.AI: Because of California’s SB 243 laws, Character.AI headquartered in Silicon Valley, California, is required to inform its users that they’re communicating with an AI model, not a real person. It also has an inbuilt detection system for people who may be at risk of self-harm.
Best for: Roleplay and chatting with AI characters.
Worth paying for if: You want faster responses. Character.AI’s plan costs $9.99 / £7.44 / C$14.05 monthly.
Skip it if: You won’t regularly go through the safety settings with a minor at home.
Best alternative: ChatGPT.
Perplexity Pro: Perplexity is headquartered in San Francisco, California and it is required by state AI laws to be open about certain information and training data.
Best for: More accurate research.
Worth paying for if: You want an alternative to regular search engines. The Pro plan costs $17 / £12.67 / C$23.90 monthly.
Skip it if: A regular search engine works perfectly for you.
Best alternative: ChatGPT.