What Is the New Federal AI Regulation?

The conversation around federal AI regulation is changing quickly in 2025. You might be hearing about new White House orders, big debates in Congress, and different rules popping up in different states. It can be hard to track what is happening. This article breaks down the U.S. government’s current plan, what it means for innovation and consumer protection, and why you will see states creating their own rules. We will explain the new pro-innovation focus and what failed in Congress.

The White House’s New Pro-Innovation AI Plan

The Trump administration has shifted the government’s approach to federal AI regulation.  In January 2025, the new administration rescinded the previous “Safe, Secure, and Trustworthy AI” order.  It replaced it with a new policy, outlined in an executive order titled “Removing Barriers to American Leadership in AI.”

This new plan’s goal is to make innovation the top priority. It directs federal agencies to remove rules that might slow down AI development.  This approach is part of “America’s AI Action Plan,” which aims to help U.S. companies lead the world in AI.

Why You Will See More State-Level AI Laws

While the White House focuses on innovation, the biggest federal AI regulation story from Congress is a failed proposal. Earlier this year, a 10-year “moratorium” on state AI rules was proposed.  This would have banned states from passing their own AI laws. 

However, this moratorium failed. The Senate voted 99-1 to remove it from the budget bill.  This failure is a huge deal. It means states like Colorado, and dozens of others, are now free to create their own AI rules.  This will likely create a patchwork of different state-level laws covering everything from AI in hiring to consumer data privacy.

In 2025, federal AI regulation is focused on speeding up innovation and ensuring government-used AI is neutral. However, the real action on consumer protection and privacy rules will likely happen at the state level.