While Washington argues over whether states should be allowed to regulate artificial intelligence at all, the states have quietly gone ahead and done it. As of July 1, more than half of them have enacted a combined 109 AI laws this term, according to a midyear analysis by Scott Babwah Brennen, director of the NYU Center on Technology Policy, published in Tech Policy Press.
Add 28 new laws aimed specifically at data centers and the picture becomes hard to argue with: state legislatures, not Congress, are writing the rules for AI in America.
Regulating under federal pressure
The activity comes despite a sustained campaign from the federal government to stop it. In December 2025, President Trump signed an executive order directing the Attorney General to create an AI Litigation Task Force charged with challenging state AI laws the administration considers more than minimally burdensome. The same order told the Commerce Department to explore withholding federal broadband funding from states that pass rules it deems onerous.
The pressure may be having an effect, though not the one its authors intended. Twenty-nine states have enacted AI legislation so far in 2026, down from 39 by the same point last year. Yet the total volume of lawmaking has barely slowed: 109 laws now against 121 at this stage of 2025. Fewer states are legislating. The ones that are have not eased up.
Partisanship explains less than you might expect. Roughly 31 percent of the AI laws enacted this year had sponsors from both parties, essentially unchanged from last year, and lawmakers on both sides are increasingly drawn to the same set of topics.
Chatbots are the new common ground
The busiest corner of state AI regulation in 2026 is companion chatbots. Legislators introduced more than 100 bills on the subject this year and enacted 14 of them. Notably, the signatures came from six states under full Democratic control and eight under full Republican control, a genuine cross-partisan wave in an area that belonged to California and New York alone in 2025.
Most of the new laws follow the template those two states set: operators must warn users that a chatbot is not a human being and must address specific risks, including sexual content involving minors and content that encourages self-harm. The parties do split on one point. Republican-backed bills are more likely to demand age verification and parental oversight, while Democratic versions tend to stop short of both.
Data centers lose their free ride
For fifteen years, state data center legislation meant one thing: tax incentives. That era is closing. Among the 28 data center laws enacted this year, Oklahoma’s Data Center Customer Ratepayer Protection Act requires utilities to design special tariffs so that large customers, not households, carry the costs of serving them. Alabama created a review process for large load contracts at its Public Service Commission. Idaho restricted the water sources data centers may tap for cooling.
Two states went after the incentives themselves. Washington removed a tax exemption for data center replacement equipment, and Maine cut data centers out of a business equipment tax break. Dozens of cities have paused data center development altogether, and the idea is climbing the ladder: Maine’s legislature passed a statewide moratorium that was vetoed, while New York’s version currently sits on Governor Kathy Hochul’s desk.
Consumer protection fills the vacuum
States also leaned into their oldest role, consumer protection. At least six new laws restrict how health insurers can use AI, enacted in Republican-led states such as Iowa and Democratic-led states such as Washington. Connecticut and Nebraska placed limits on AI-driven dynamic pricing, and several states added new disclosure requirements and professional licensing rules.
Not every front advanced. Colorado, which passed the country’s broadest algorithmic discrimination law in 2024, significantly scaled it back this year. Frontier model regulation remains mostly a blue state project: California and New York required major AI developers to adopt safety frameworks and report critical incidents in 2025, Illinois has now passed a bill adding annual third-party audits, and Connecticut settled for whistleblower protections for AI lab employees.
The back half of the year turns on two questions. Massachusetts, California and New Jersey are weighing proposals that would meaningfully extend frontier and chatbot regulation, and nobody yet knows how aggressively the new federal litigation task force will move against laws already on the books. The answers will shape not just this year’s statutes but the balance of power over AI regulation in America. For more coverage of AI policy and regulation, visit Mylistingo.
