At the Foundation for Economic Education, Kevin T. Frazier and Antoine Langrée consider how artificial intelligence can be regulated by state and federal bodies:
Yes, I’m still 12
President Donald Trump’s executive order on artificial intelligence invites analysis of a question so complex that it rarely gets asked: “What exactly do states have the authority to regulate?”
The current, somewhat trite answer is, “The residuary powers reserved under the Tenth Amendment”. Omitting the legalese, that means that states can do whatever the federal government cannot.
States have the power to look out for the health, safety, and welfare of their residents. Thus, for instance, they have the power to address local concerns through zoning laws, professional certifications via licensing regimes, and ensure public safety through law enforcement. These authorities make up what’s often referred to as a state’s “police powers”.
While this generic reading of state power is not necessarily wrong, it’s imprecise. As the AI Litigation Task Force created by Trump’s EO starts its work, a more specific answer is warranted.
The task force is charged with challenging “unconstitutional, preempted, or otherwise unlawful State AI laws that harm innovation”. Reading between these lines, its mission is to contest state laws that interfere with the Administration’s vision for a national AI policy framework. This isn’t an unlimited charge, though. Federal courts reviewing state laws will only strike them down if they fail to align with the Constitution’s allocation of authority or otherwise prove unlawful.
Many stakeholders in AI debates liberally interpret the authorities afforded to states. Based on concerns of existential risk to humanity and the idea that states must protect the health of their citizens, state legislators have proposed and enacted laws that impose significant obligations on the development of AI. Some assume they must have this right, since protecting the lives of their residents is a core priority and unquestioned authority of state governments. After all, since the founding, states have been able to enforce quarantines out of a concern for public health — aren’t aggressive AI laws just extensions of such public health measures, but tailored to the threat of modern threats?
It’s not that simple. States’ police powers are reasonably broad, but not unlimited. States must respect both an upper bound — the purview of enumerated powers reserved for federal authority — and a lower bound—the rights retained by the states’ citizens. These constraints have been tested in litigation throughout our Constitution’s history, notably when state law conflicts with the federal government’s exclusive authority over interstate commerce and when states unduly limit the freedoms of their residents.
These notions are relatively blurry and highly contextual. As national regulatory policy evolves, so too does the extent of preemption. The Lochner era, for example, was a paradigm shift for state police power: as courts expansively interpreted the individual liberty to contract, states’ police power over health, labor protections, and market regulation shrank significantly — only to be restored later. Likewise, individual liberties and valid justifications for their abridgment have evolved to fit developments in civil rights law — from Brown v. Board to Dobbs and Lawrence.
Despite these significant changes in context, the constitutionality of states’ exercise of their police powers follows a bounded framework. This can be observed in the jurisprudence on public health measures — a prime example of police powers. Quarantine orders, from nineteenth-century epidemics to Covid-19, have a direct link to protecting local communities — one of the most important elements of state police powers. They respect the upper and lower bounds of police powers. First, they are geographically specific: they only affect local residents or people coming into local communities. Second, they directly reduce the risk to state residents: quarantines are known solutions to real threats to the health and safety of local communities. They infringe the individual liberties only insofar as is necessary to protect state residents’ vital interests.
