The Hidden Costs of AI Preemption | The Regulatory Review

The Regulatory Review has published Knapp's case against a blanket congressional preemption of state AI law, and its warmest defence of the states is that they are 'policy laboratories where unintended harm first surfaces locally.' Which is the most honest description of a laboratory anyone has written down: it is, definitionally, the building where the thing blows up first while the rest of us wait for the write-up. Fifty jurisdictions running fifty experiments, the argument goes, is a feature. It is a feature if you are the researcher. If you are in the building, it is Tuesday.

Then there is the money, which is the part everyone skips. Wherever federal AI law imposes obligations on states or localities — audits, reporting, enforcement, oversight — the article insists the funding must come with them, or Congress has simply built an unfunded mandate with a machine-learning wrapper. Charming. Washington has spent four decades perfecting the unfunded mandate, and the only novelty AI brings is that the compliance paperwork now writes itself in seconds. Demanding the cheque arrive attached to the duty is a bit like asking the landlord to fix the boiler before winter: technically reasonable, historically optimistic.

Note what a blanket preemption would actually erase. New York's 'nation-leading' moratorium on hyperscale data centre construction, which we admired last week, is exactly the sort of local judgement a single federal rule would overwrite — no laboratories, no experiments, just one standard drafted by whoever retained the better lobbyists. The article wants states kept as laboratories and wants their experiments funded, which is a coherent position and a lonely one. Both halves are, in fairness, entirely good ideas. Neither has a sponsor, and the hidden cost in the title stays hidden mostly from the people actually paying it, which is the traditional arrangement.