The Trump administration's new AI Action Plan suggests withholding federal funding from states that have overly strict AI regulations. It emphasizes that AI's importance should not be hindered by excessive bureaucracy. The plan outlines that while states can regulate AI, these laws should not hinder innovation. Federal agencies will take into account the regulatory environment of states when making funding decisions. Previously, there was an attempt to restrict state regulation through the "Big Beautiful Bill," though it faced pushback and was amended.
The Trump administration proposed withholding federal funding from states that impose "burdensome" AI regulations, arguing it would be wasteful to encumber innovation at this stage.
Federal agencies will adjust funding based on states' AI regulatory climates, potentially limiting support if regulations hinder funding effectiveness.
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