State AI Rules Remain a Risk Despite Federal Restraint, Lawyer Argues

Companies developing or using AI should not interpret federal enforcement restraint as protection from state scrutiny, Abhishek Kambli argues in Bloomberg Law. The Holtzman Vogel partner describes a widening divide between the Trump administration’s approach to AI oversight and states’ legislative and enforcement activity. Kambli cites state requirements covering developer disclosures, safety audits and employment-related bias testing. He also describes Pennsylvania action concerning a chatbot’s alleged misrepresentation as a psychiatrist and a Florida investigation involving ChatGPT. These examples are presented as the author’s account of legal developments, rather than independently verified findings or determinations of liability. The commentary contrasts those state efforts with what Kambli characterizes as the Justice Department’s reluctance to establish AI regulation through novel prosecutions. He recommends that businesses identify applicable state obligations, preserve records and examine their marketing. Companies purchasing AI tools, he adds, should scrutinize vendors and revisit contractual protections against disruption and liability. His central warning is that reduced federal intervention does not eliminate compliance risks for either AI developers or their customers.