Reps. Jay Obernolte (R-Calif.) and Lori Trahan (D-Mass.) on Thursday released a 269-page discussion draft of the Great American Artificial Intelligence Act, a bipartisan framework that would suspend state regulation of AI model development for three years while codifying a federal safety apparatus around it. Four co-sponsors signed on: Reps. Scott Franklin (R-Fla.), Suhas Subramanyam (D-Va.), Erin Houchin (R-Ind.) and Scott Peters (D-Calif.).

The preemption is narrower than the framing suggests. Per Roll Call, it reaches only state laws “specifically regulating the development” of AI, leaving deployment and use statutes intact and sunsetting after three years. A document from Trahan’s office identifies California’s AB 2013 training-data disclosure law and part of SB 942’s watermarking regime as preempted, while frontier safety statutes in California, New York and Illinois would be “federalized.”

The federal scaffolding is substantial. The bill codifies the Center for AI Standards and Innovation, which Commerce Secretary Howard Lutnick rebranded from the AI Safety Institute in 2025, and authorizes $100 million annually across fiscal 2027 through 2029. It also formally stands up the National Artificial Intelligence Research Resource, which Nextgov reports could accept private-sector donations. Frontier developers with more than $500 million in prior-year gross revenue would be required to publish safety frameworks and report critical incidents. Penalties for AI-assisted fraud and impersonation of government officials would rise.

Industry response split immediately along predictable lines. Jason Oxman, who runs the Information Technology Industry Council, framed the draft as a way to “win the AI race.” Brendan Steinhauser of the Alliance for Secure AI countered that the federal architecture “does not justify preempting states’ ability to pass their own AI safeguards.”

Timing matters. President Trump signed an executive order establishing voluntary federal reviews of frontier models two days earlier, per FedScoop, meaning the statutory floor and the voluntary ceiling arrived in the same week. For tooling vendors operating across jurisdictions, including model-agnostic deployment platforms like LemonLime, a single federal compliance surface is the optimistic read. The pessimistic one is that three years is the half-life of a regulatory truce.

Sources