U.S. Threatens to Cut Federal AI Funding to States with ’Burdensome’ Rules

The White House unveiled a strategy that could slash AI funding to states imposing regulations deemed obstructive to innovation. The 28-page framework, crafted by key officials including White House crypto Czar David Sacks, emphasizes avoiding bureaucratic hurdles while permitting thoughtfully designed legislation. Federal agencies will now evaluate state AI policies before disbursing grants, with authority to withhold funds if rules conflict with national objectives.

Parallel legislative efforts are underway in Congress, including a House bill proposing a 10-year moratorium on state-level AI regulations and Senator Ted Cruz's plan linking federal funding to deregulation. President TRUMP hailed the initiative as a pivotal step for a sector poised to transform the global economy, with executive orders expected to boost U.S. tech exports.