AI legislation in the US: A 2025 overview
In this article
Summary
The United States has introduced several key legislative measures to regulate AI. However, the complexity of federalism has made it challenging to implement a unified AI policy. In addition, a lot has changed after Donald Trump started his second and current tenure as the President of the United States.
During the 2024 campaign, Trump pledged to roll back what he called restrictive and ideologically driven AI policies. As President, he followed through by signing a new Executive Order aimed at promoting innovation and reducing regulation.
This article offers a current overview of US AI legislation to help business leaders navigate compliance and risk.
A complete and current overview of US legislative AI measures and principles
The legislative measures and principles listed below are meant as a general overview. While the timeline for many of these measures varies, the following provides an up-to-date overview of current efforts.
National Artificial Intelligence Initiative Act of 2020 (NAII)
Signed during President Trump’s first term, the National Artificial Intelligence Initiative Act of 2020 legislation promotes and funds artificial intelligence innovation initiatives throughout key federal agencies.
Executive order: Removing barriers to American Leadership in Artificial Intelligence
The executive order titled “Removing Barriers to American Leadership in Artificial Intelligence”, signed by President Trump on January 23rd, 2025, aims to sustain and enhance America’s global AI dominance by promoting human flourishing, economic competitiveness, and national security.
Winning the Race: AMERICA’S AI ACTION PLAN
Winning the Race: AMERICA’S AI ACTION PLAN introduces a set of policy recommendations that aim to secure U.S. global AI dominance, framing AI leadership as essential for economic growth, national security, and a new era of innovation.
AI Training Act
The S.2551 – AI Training Act requires the Office of Management and Budget (OMB) to establish or otherwise provide an artificial intelligence (AI) training program for the acquisition workforce of executive agencies.
State-level AI legislation
According to the National Conference of State Legislatures, more and more states have introduced AI-related legislation over the last few years. In the 2025 legislative session, all 50 states, Puerto Rico, the Virgin Islands, and Washington, D.C., have introduced legislation on this topic. Thirty-eight states adopted or enacted around 100 measures this year.
Introduction: When technology meets legislation
Artificial Intelligence was once the stuff of science fiction, but at the time of writing, it is the fastest adopted business technology in history.
AI has become a boardroom priority. According to BCG, three-quarters of executives rank it as a top-three strategic focus for 2025. This surge in AI adoption highlights its profound impact, comparable to the revolutionary advent of electricity. McKinsey reports that 78% of organizations already use AI in at least one business function.
However, with great opportunities come significant challenges and uncertainties.
While the potential benefits of AI for business, society, healthcare, transport, and culture are significant, these advantages are overshadowed by real risks, including security breaches, misinformation, and flawed decision-making processes.
As with any emerging technology, AI’s rapid evolution has outpaced regulatory frameworks. However, the introduction of the European Union’s EU AI Act on August 1, 2024—the world’s first comprehensive AI law—marks a turning point in the legal landscape.
While the EU leads in AI regulation, other countries are also developing their own frameworks.
According to the May 2025 Global AI legislation tracker, countries around the world are developing and implementing AI governance legislation and policies. Efforts include creating comprehensive laws, specific regulations for particular use cases, and voluntary guidelines and standards.
Stanford University has noted a significant increase in the number of countries with AI-related laws; legislative mentions of AI rose 21.3% across 75 countries since 2023, marking a ninefold increase since 2016.
This article serves as a general and up-to-date overview of current AI legislation in the US, so that business leaders in America and beyond can better prepare for compliance.
American AI legislation and the complexity of federalism
In the United States, the complexity of federalism has made it challenging to implement a unified AI policy. Currently, there is no overarching AI Act.
The closest initiative is the National Artificial Intelligence Initiative Act of 2020 (NAII) introduced by President Trump in his first term, and the recently introduced set of policy recommendations in the recently published: Winning the Race: AMERICA’S AI ACTION PLAN.
American AI legislation and the effect of Trump’s presidency
Since President Donald Trump began his second term in January 2025, federal AI policy has undergone significant shifts.
While policy developments continue to evolve, the Trump administration’s focus on technological leadership and reduced regulatory oversight is a significant shift from past approaches taken by the former Biden administration.
What happened to Biden’s Executive Order and the AI Bill of Rights?
Up until very recently, there was the Executive Order (EO) on the ‘Safe, Secure, and Trustworthy Development and Use of AI,’ issued on October 30, 2023, by former President Biden, along with the AI Bill of Rights.
Biden’s EO directed agencies to implement new guidelines, rules, and policies, appoint AI officers, participate in international collaborations, and, in some cases, advance regulatory proposals.
During the 2024 campaign run during the Republican National Convention in July 2024, Trump stated:
“We will repeal Joe Biden’s dangerous Executive Order that hinders AI innovation and imposes radical left-wing ideas on the development of this technology. In its place, Republicans support AI development rooted in free speech and human flourishing.”
As promised, mere days after Trump took office in January of 2025, these efforts have been revoked.
On January 23, 2025, President Trump signed a new Executive Order, titled “Removing Barriers to American Leadership in Artificial Intelligence.” This policy focuses on revoking directives perceived as restrictive to AI innovation, paving the way for “unbiased and agenda-free” development of AI systems.
On July 23rd of 2025, the White House released “Winning the AI Race: America’s AI Action Plan”. A document that identifies over 90 Federal policy actions across three pillars – Accelerating Innovation, Building American AI Infrastructure, and Leading in International Diplomacy and Security.
A day later, on July 24th of 2025, President Trump signed a trio of executive orders that he vowed would turn the United States into an “AI export powerhouse”, including one targeting what the White House described as “woke” artificial intelligence models. He also mentioned that his predecessor, Joe Biden, had “established toxic diversity, equity and inclusion ideology as a guiding principle of American AI development”.
However, it is important to note that not all Biden administration AI efforts were rolled back. For example, Executive Order 14141 (The Biden 2025 AI Infrastructure EO) and the Executive Order 14144 (The Biden 2025 Cybersecurity EO). To this date, these Executive Orders remain intact, as the Trump Administration has not revoked them.
Let’s look at a more detailed overview of the current AI legislative landscape in the United States.
A detailed summary of important US legislative AI measures and principles
By studying the following key legislative measures and principles, organizations can better ensure their AI systems are compliant with emerging US regulations.
What is the National Artificial Intelligence Initiative Act of 2020 (NAII)?
The National Artificial Intelligence Initiative Act of 2020, introduced under the Trump administration, was one of the first major national efforts specifically targeting artificial intelligence. However, its primary focus is less on regulating AI and more on fostering research and development in the field. The Act aims to solidify the United States’ position as a global leader in AI innovation.
Purpose of the NAII Act
The primary purpose of the 2020 act is to guide AI research, development, and evaluation at various federal science agencies, to drive American R&D into AI technology, and champion AI use in government. The Trump-era Act advocated for “a more hands-off, free market–oriented political philosophy and the perceived geopolitical imperative of “leading” in AI.”
Impact of the NAII Act
The American AI Initiative’s central impact on business in the US has been the coordination of AI activities across different federal agencies. Below we list the main agencies affected and their directions, with emphasis on those affecting business across the country.
The National Science and Technology Council is to establish an Interagency Committee to coordinate federal programs and activities in support of the initiative.
The Department of Energy (DOE) is to establish the National Artificial Intelligence Advisory Committee to advise the President and the Initiative Office on matters related to the initiative.
The DOE must also carry out an artificial intelligence research and development program to:
- Advance artificial intelligence tools, systems, capabilities, and workforce needs; and
- Improve the reliability of artificial intelligence methods and solutions relevant to DOE’s mission.
The National Science Foundation (NSF) is to enter a contract with the National Research Council of the National Academies of Sciences, Engineering, and Medicine to conduct a study of the current and future impact of artificial intelligence on the workforce of the United States.
The National Institute of Standards and Technology is to develop voluntary standards for artificial intelligence systems, among other things.
Crucially, the goal of these standards is not—as is the case in the EU—to make AI technology safer, more secure, and more trustworthy, but instead “to advance US AI leadership.”
The NSF is also ordered to fund research and education activities in artificial intelligence systems and related fields.
And finally, the National Artificial Intelligence Initiative Act of 2020 is to provide regulatory guidance on AI, which “reflects American values.”
What is the Executive Order: Removing barriers to American Leadership in Artificial Intelligence?
The recent executive order titled “Removing Barriers to American Leadership in Artificial Intelligence”, signed by President Trump on January 23rd,2025, aims to sustain and enhance America’s global AI dominance by promoting human flourishing, economic competitiveness, and national security.
Purpose of the Executive Order
This order will revoke certain AI policies and directives that act as barriers to American AI innovation, essentially clearing a path for the United States to act decisively to retain global leadership in artificial intelligence. In order to maintain this leadership, AI systems that are developed must be “free from ideological bias or engineered social agendas.”
Key aspects of the Executive order
- Developing an Artificial Intelligence Action Plan
Within 180 days of this order, key advisors on science, technology, AI, crypto, national security, economic policy, and domestic policy, along with relevant government officials, must create and submit a plan to the President to carry out the policy in section 2 of this order. - Implementation of order revocation
Key officials, including the APST, the Special Advisor for AI and Crypto, and the APNSA, must immediately review all actions taken under the revoked Executive Order 14110 on AI. They will identify any actions that conflict with the new policy and work with relevant agencies to suspend, revise, or rescind them as necessary. If changes cannot be made immediately, exemptions will be applied until finalized.
What is AMERICA’S AI ACTION PLAN?
Winning the Race: AMERICA’S AI ACTION PLAN presents a series of policy recommendations designed to ensure the United States maintains its leadership in artificial intelligence, emphasizing that dominance in AI is crucial for economic advancement, national security, and fostering a new wave of innovation.
What is the impact of AMERICA’s AI ACTION PLAN?
The document identifies over 90 Federal policy actions across three pillars – Accelerating Innovation, Building American AI Infrastructure, and Leading in International Diplomacy and Security.
Key aspects of AMERICA’s AI ACTION PLAN
- Exporting American AI
The Commerce and State Departments will partner with industry to deliver secure, full-stack AI export packages – including hardware, models, software, applications, and standards – to America’s friends and allies around the world. - Promoting rapid buildout of data centers
Expediting and modernizing permits for data centers and semiconductor fabs, as well as creating new national initiatives to increase high-demand occupations like electricians and HVAC technicians. - Enabling innovation and adoption
Removing Federal regulations that hinder AI development and deployment, and seeking private sector input on rules to remove. - Upholding free speech in frontier models
Updating Federal procurement guidelines to ensure that the government only contracts with frontier large language model developers who ensure that their systems are objective and free from top-down ideological bias.
State-level AI legislation
The National Conference of State Legislatures reports that an increasing number of states have proposed AI-related legislation in recent years.
During the 2025 legislative session, all 50 states, along with Puerto Rico, the Virgin Islands, and Washington, D.C., have brought forward legislation on this issue. This year, thirty-eight states have adopted or enacted approximately 100 measures concerning AI.
Let’s look at a few key examples.
The Colorado AI Act
Effective since May 17, 2024, the Colorado AI Act was the first comprehensive AI legislation in the US. It adopts a risk-based approach to AI—similar to the EU’s recent AI Act—primarily targeting the developers and deployers of high-risk AI systems.
California’s AI laws
California has chosen a more fragmented approach to legislation. Instead of passing a single comprehensive bill, the state has developed a collection of laws, each targeting a specific sector or issue related to AI. Some set specific rules for deepfake technology, others to ensure transparency in AI, protect data privacy, or outline how AI can be used in healthcare.
US AI legislation and its implications for business
Though legislation on AI in the US is piecemeal, businesses must still take note of the current, emerging, and potential future regulations discussed in this article.
According to the National Law Review (NLR), “Businesses should stay informed of policy developments while maintaining robust AI governance and compliance frameworks that can adapt to changing federal priorities while ensuring compliance with any applicable legal and regulatory obligations and standards.”
Moreover, the penalties for AI non-compliance in the US can be hefty.
AI-related penalties and fines in the US
At present, whilst there is no comprehensive federal Act governing AI use and risk mitigation, there is still a range of laws that can result in severe financial penalties, such as in the following examples:
- In 2022, China-based iTutor Group was fined by the USA’s Equal Employment Opportunity Commission (EEOC) for automated age discrimination in their AI hiring software. The company was fined USD $365,000 under the charge of AI bias.
- Also in 2022, California-based FinTech firm Hello Digit was fined $2.7 million for a faulty AI algorithm in their app, which left users paying unnecessary overdraft fees. They were penalized on grounds of AI efficacy by the US Consumer Financial Protection Bureau (CFPB).
- In 2023, two US lawyers were fined $5,000 for submitting citations in a court case that had been falsely generated by ChatGPT, breaching AI regulation on transparency and efficacy.
- In 2024, the SEC filed charges against two investment advisory firms for making false and misleading claims regarding their use of artificial intelligence. The companies reached a settlement with the SEC and had to pay a total of $400,000 in civil penalties.
- In July 2025, a federal judge mandated that two attorneys in a Colorado defamation case each pay $3,000. This ruling followed their use of artificial intelligence to draft a court filing that was rife with errors and references to fictitious cases. The judge found that they had breached court rules by filing this document, which featured more than twenty mistakes, including fabricated cases created by AI tools.
Conclusion
AI legislation in the US differs significantly from that in other parts of the world. So far, the focus has primarily been on innovation, government AI use, and reinforcing “traditional American values.”
For organizations operating within (and with) the US, navigating the myriad of AI legislation and proposals can be challenging. Nevertheless, it’s essential to keep an eye on what is needed for US AI compliance, especially during a period with so much change.
Learn more about AI use and regulation in business by exploring the Software Improvement Group blog.
Are you ready for the complexities of US AI legislation? Our AI readiness guide, authored by Rob van der Veer, simplifies compliance with evolving regulations like the Colorado AI Act (last updated in August of 2025). With 19 steps covering governance, security, and IT. It helps organizations minimize risk and harness AI’s full potential, while staying ahead of regulatory changes.
Don’t wait for AI regulations to catch up. Download our AI readiness guide now to navigate U.S. legislation with confidence.
