Congress is actively addressing this conflict. On June 4, 2026, Representatives Jay Obernolte and Lori Trahan released the bipartisan Great American AI Act, which would establish a federal framework and impose a three-year freeze on new state AI development laws. The proposal would preserve existing state authority over consumer protection, civil rights, privacy, and deployment rules, but the scope of that carve-out remains undefined. Whether the FTC's enforcement position will survive congressional action, and how broadly the federal freeze would apply, are still unsettled.
AI companies face immediate compliance exposure. Even full adherence to state AI rules may not shield them from FTC deception enforcement, creating a scenario where companies must exceed state requirements or accept federal risk. Attorneys advising AI clients should monitor both the FTC's final framework and the Great American AI Act's progress through Congress, as either development could materially alter compliance obligations and enforcement priorities.