Trump Says Congress Wants to Regulate AI Out of Business

President Donald Trump said the US Congress wants to regulate the AI industry out of business, according to a Punchbowl News interview published on Friday, Reuters reported on August 7. The comments came amid growing debate over AI oversight in Washington as lawmakers weigh a wave of proposals targeting the technology.

A Burst of AI Legislation

This week alone saw several AI-related bills move on Capitol Hill, Nextgov reported, including measures to deter AI model distillation by foreign adversaries, to tax large AI developers to fund job creation in the face of AI-driven layoffs, and to require health insurers to disclose when AI has been used to evaluate claims. The legislative push reflects both parties' scramble to respond to AI's rapid deployment — and the widening gap between what the administration wants and what Congress is proposing.

States Aren't Waiting

With the federal debate stalled, states are moving on their own. Colorado this year became the first state to enact chatbot-specific AI legislation aimed at protecting minors from psychological and safety harms, a law that takes effect January 1, 2027, according to an August policy roundup by ML Strategies. The Colorado act signals a shift away from broad state AI regulation toward narrower, harm-specific disclosure rules — a trend that could accelerate no matter how the federal fight plays out.