Bipartisan Momentum Builds for AI Regulation in US
A bipartisan push for comprehensive AI regulation is gaining momentum in the U.S. A Washington state bill to regulate AI chatbot interactions with minors is advancing rapidly, while a California bill aims to increase penalties for AI-driven deepfake fraud.
- The Washington state bills (HB 2225/SB 5984) would create a private right of action under the state's Consumer Protection Act, allowing individuals to file civil lawsuits against chatbot operators for violations. An amendment to the Senate version of the bill explicitly exempts AI bots used for financial services, customer service, or technical assistance. - At the federal level, a December 2025 executive order established an "AI Litigation Task Force" with the mandate to challenge state-level AI laws that are perceived to be inconsistent with the administration's "minimally burdensome" national policy framework. This creates a complex regulatory risk environment for companies operating nationwide, as over 1,000 AI-related bills were introduced in states during 2025 alone. - The push to regulate deepfakes is underscored by significant financial losses, which totaled $1.56 billion from fraud in 2025 and are projected to potentially reach $40 billion in the U.S. by 2027. In response, venture capital is flowing into detection technology, and cyber-insurance premiums are expected to rise for companies lacking deepfake detection tools. - Investment banks are already restructuring their TMT groups to better capture AI-driven deal flow; Goldman Sachs merged its telecom and "CoreTech" teams into a new global infrastructure technology sector to focus on AI deals. This follows a 51% quarter-over-quarter jump in TMT M&A transactions in Q3 2025, which reached $256 billion. - While the U.S. lacks a comprehensive federal framework, Europe's AI Act provides a potential model that financial institutions are monitoring. The EU law designates AI used for credit scoring and insurance risk assessment as "high-risk," imposing heightened governance and risk management requirements on financial firms utilizing such technologies. - Beyond chatbots and deepfakes, Colorado's comprehensive AI Act, set to take effect on June 30, 2026, requires developers of "high-risk" AI systems to use reasonable care to prevent algorithmic discrimination and carries penalties of up to $20,000 per violation. This law was specifically cited in a White House executive order as an example of potential state overreach.
