DOJ Wins Sweeping Preemption, State Laws Collapse
Federal courts rule that state AI laws unconstitutionally burden interstate commerce under the Dormant Commerce Clause. California's transparency requirements, Colorado's discrimination protections, and Texas's governance rules all fall. States lose BEAD broadband funding for non-compliance. AI companies operate under minimal federal oversight until Congress passes comprehensive legislation—which could take years given political gridlock. This mirrors the REAL ID Act outcome where federal standards ultimately prevailed despite initial state resistance.
