A State Policymaker’s Playbook For AI Success

The Opportunity

Artificial Intelligence is a general-purpose technology—like electricity or the internet—that will define U.S. competitiveness, productivity, and prosperity for decades. With the right approach, AI can expand economic opportunity, improve health and education, and create abundance for all. See real-world examples at AI Opportunity.

Why It Matters

• Jobs & Growth: AI will create entire industries and expand workforce productivity; it can help a state’s farmers, doctors, small businesses, and teachers—if government gets out of the way.
• State Leadership: Pro-innovation policies will attract AI entrepreneurs, jobs, and investment. Policymakers should treat AI as the opportunity it is, and we will be the generation that provides every student with a private tutor and every patient with access to personalized treatments.
• Global Competitiveness: Adopting a free-market framework ensures the U.S. will lead the way in global AI innovation, outpacing China and any potential adversaries.

Guiding Principles

Freedom to Build

No permission slips for entrepreneurs. Innovators should be free to build without Washington-style bureaucrats standing in the way.

• Building the Launchpad for an AI Moonshot: Build the infrastructure, regulatory scaffolding, and policy incentives to allow the private sector’s “rocket ship” of innovation to launch.
• The AI Technopanic and Its Effects: Exaggerated fear rhetoric around AI distorts public discourse.
• Evaluating AI Policy Proposals: Key questions for policymakers to ask.
• Resolving to Defend AI Innovation in the States: Protect innovation-friendly environments while balancing accountability.

Policy Proposals

• Right to Compute Act: Computational freedom is not a privilege to be granted by government, but a natural extension of rights we already possess that should be protected by government. After being passed in Montana, this concept has been introduced in Ohio and New Hampshire.

Punish Abuse, Foster Learning

Like other computing technology, AI is a tool. We should not preemptively regulate people building tools with unknown upside potential; instead, we should hold bad actors accountable when they use any tool to commit fraud or violate rights.

• Regulating Machine Learning Open-Source Software: Regulatory burdens on open-source developers would concentrate power, stifle innovation, and undermine the real-world benefits of open-source AI.

Policy Proposals

• The Technology‑Neutral Anti‑Discrimination Clarification Act: Clarifies what might not be obvious to many: current laws protect consumers from discriminatory harms.
• The Stop Non-Consensual Distribution of Intimate Deepfake Media Act and Stop Deepfake CSAM Act: Already passed in many states, these proposals focus on a particular harm and ensure existing laws apply to new forms of virtual content.

Open Models, Open Markets

Encourage open-source participation to democratize AI development and reduce the concentration of power.

• Promoting Competition in Artificial Intelligence: A regulatory framework that encourages innovation and competition.
• The Vibrant AI Competitive Landscape: The current AI ecosystem is deeply vibrant and competitive across hardware, models, cloud, and applications. Overregulation will undermine competition.

Sunset the Red Tape

New rules should work for today and tomorrow. We will actively review, revise, and repeal—keeping government flexible and accountable.

• Resetting AI Regulation: AI policy should include sunset provisions, iterative review, and risk-based oversight, preserving the state’s role as an innovation-friendly leader.
• Clearing the Path for AI: A patchwork of state AI regulations, like we have in data privacy and security, threatens innovation and commerce.
  • Virginia’s Misguided Attempt to Regulate AI
  • How Nebraska’s AICPA Tries to Solve a Problem that Doesn’t Exist
  • Could Texas Strangle its AI Boom before it Starts?
  • California’s AB 1064: A Well-Intentioned but Risky Step on AI Chatbots
  • Defining “Artificial Intelligence” in State Legislation

Policy proposals

• State Artificial Intelligence Act: Includes a regulatory sandbox provision or “regulatory mitigation” program to foster innovation.
• Utah’s Mental Health Chatbot Act: Represents a thoughtful and balanced regulatory model for AI applications in mental healthcare, combining user protection, ethical considerations, and innovation-friendly policies. A far better approach than what Illinois did here.

Government Use

Proper use of AI can streamline and improve government functions, saving taxpayers’ money while protecting residents’ interests and rights. There are enormous opportunities for such benefits in state procurement, benefits administration, resident services, and even emergency services and natural disaster mitigation and relief. See Improving Government Efficiency with AI Technologies.

Build Energy Abundance

To reap the benefits of AI innovation, states have an opportunity to blaze a new trail on energy generation where we build what works.

• Data Centers: In partnership with the James Madison Institute, this article outlines the basics for a regulatory framework around data centers, their energy use, and their water use.
  • Energy Use: Data centers are the invisible foundation of the modern economy. They are computers that you use through your own devices without touching. They are large electricity users, but are willing to work with states to meet their needs without shifting costs onto others.
  • Water Use: In this article, and its follow-up, we outline fact-based responses comparing water use in energy and data infrastructure.
  • Grid Assets: Emerging evidence shows that new data centers, when structured properly, can actually pay for grid revitalization projects because of the load flexibility they bring to the grid.
• Nuclear Energy: Five states and three nuclear companies are currently suing the NRC to return nuclear regulatory authority to the states. This article summarizes the lawsuit and its potential to unlock nuclear power generated by small modular reactors.
• Build What Works: Powering Spaceship Earth offers a path forward

Closing Message

AI is not a threat to be feared, but a tool to be harnessed and leveraged. AI will be the source of the next Industrial Revolution, and states should seek to be first to build the metaphorical railroads of the future. With a free-market, pro-innovation approach, we can make our state—and America—the global leader in artificial intelligence, securing prosperity and abundance for future generations.