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A patchwork of 50 different state-level AI regulations, while competitors abroad face none, will inevitably create legal confusion and slow down US AI companies in the global race, so AI regulation should be federally preempted.

Gurley argues that laws like Colorado's AI Act and California's chatbot-safety law create a fragmented, high-friction regulatory patchwork that will hamper US AI companies relative to foreign competitors, and calls for federal preemption or a moratorium on state AI laws. ✦ AI generated

Bill Gurley · BG2 Pod · 2025-10-14 · original ↗

starts at this moment · 31:22

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Talk to us about the need for federal preemption and, again, just let's dive back into your concern about these two laws that were just passed.

If we implement 50 different state rules that these companies have to jump through, and companies that are that are competitors that are competing in the broader world don't have any of them, there is zero chance that's not going to create mud and slow down the US players. There's just zero chance.

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31:22believe we're in this global competition to to see, you know, whose tech stack for AI is used on a global basis. And if we implement 50 different state rules that these companies have to jump through, and companies that are that are competitors that are competing in the broader world don't have any of them, there is zero chance that's not going to create mud and slow down the US players.

31:49There's just zero chance. And I'm certain the people that are writing these laws don't understand that there might be some global, you know, consequence of what they're doing. But but it's bad. I mean, I can remember when Obama was excited about removing some of the state-by-state requirements on like hair stylists and whatnot because it makes it such that they can't move between states. And it's kind of

32:15ridiculous that they would have different laws and different licenses. This is like if that's a problem, this is really a problem. And so I, you know, from a global competitiveness standpoint, I would certainly hope that that they're able to federalize this and preempt it. I don't know if it's there's too much, you know, water under the bridge or not. I don't know enough about what it takes

32:39in Congress to make that happen. But I think this is bad for I think it's bad for the US. it's bad for innovation broadly. It's going to make it harder for startups to do things just because they're going to have to worry about all this stuff. Yeah, it's it's it's way worse for little tech, right? Because smaller companies don't have phalanxes of lawyers. They can, you know, go out and comply. You know, I

33:02think the other thing is listen, we already have the Civil Rights Act, we have the Fair Housing Act, we have the American with Disabilities Act. Of course, we don't want discrimination. But this just seems like broad overreach. It's no like I don't even know how you comply or enforce. And so it just ends up bogging down the entire system in uncertainty and litigation. And again, it's important to say this

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