DAVID BLACKMON: AI Firms Should Buckle Up For Regulatory Assault

How should AI be regulated, and who gets to decide? These are questions that seem certain to become dominant stories throughout 2026.

To this point in its development, the AI industry and its datacenters have been able to expand in a wild west regulatory atmosphere in which almost anything goes. That explosive expansion created a set of impacts that resulted in the public complaining to policymakers. Now, policymakers on both sides of the aisle are starting to respond.

Like it or not, this is how the American political system works. It’s exactly the same process the U.S. shale industry dealt with during the first 15 years of this century, one which resulted in the implementation of strong new regulations at all levels of government.

By contrast, the wind and solar industries largely avoided effective scrutiny due to the eagerness of politicians to virtue signal their green energy credentials. As a result, states with heavy wind and solar development lack the regulatory infrastructure needed to properly govern development and retirement of these massive industrial installations, a reality to which local communities have only recently awakened and begun to push back hard.

Now, it’s the AI industry’s turn in this regulatory spin cycle, and the big tech firms had better buckle up, because the assault is about to start in 2026. The center of the looming controversy will revolve around a conflict between national security priorities and desires by state and local governments to respond to constituent demands.

President Donald Trump wants to limit regulation of AI to the federal level based on national security concerns. The President and his key advisors believe the race with China for AI dominance is the equivalent of a 21st century cold war, the winner of which will become the dominant world power for decades to come.

Based on that view, the President signed an executive order in early December designed to limit the ability of states to enact their own AI-related regulations. The order directs agencies to participate in an AI litigation task force chaired by the Department of Justice to challenge state laws deemed inconsistent with federal policy or that pose unconstitutional burdens on interstate commerce. It conditions federal funding on states not having “onerous” AI laws or regulations, and it directs the task force to develop legislative recommendations for a uniform federal AI framework that would preempt conflicting state laws.