OPINION:
In the technology world, the best dealmakers are the ones who can bring an innovative approach to the negotiating table. When some might be content on the defensive, innovators have an uncanny ability to flip the script and extract big wins for their businesses. Their fuel in these scenarios? Having a superior product or service and the confidence necessary to sell it.
As Washington descends into a stalemate surrounding government funding, Republican leaders should be negotiating with far more opportunism. They have a superior product to sell and shouldn’t hesitate to extract concessions from Democrats as talks continue.
An issue that we need to address immediately is the patchwork of state AI regulations. Congress nearly passed a fix for this dynamic as part of President Trump’s One Big Beautiful Bill Act, only to have special interests kill the legislation as it went to the floor for a vote in the Senate.
As the CEO and co-founder of Telnyx, an artificial intelligence telecom company, I’ve seen firsthand how government regulation can make or break American small businesses. From expanding broadband to rural towns to modernizing customer service with new tools, innovation is the lifeblood of growth. That’s why the debate in Congress over AI is so critical.
Republicans are becoming the party of innovation while Democrats increasingly copy the European Union with burdensome overregulation that smothers progress. Just look at the EU’s 2024 AI Act, which threatens fines of up to $41 million, or 7% of global turnover, and is thus pushing behavior changes in the tech/AI sector.
If Republicans want to flip the script in these funding talks, they should lock in federal preemption now and keep America, not the EU, setting the pace on AI. The time to strike is now.
The AI community has hope as we watch a surge of conservatives from the administration to Congress indicate that it may be time to try again with respect to a moratorium. Sriram Krishnan, senior AI adviser to President Trump, made the point to Politico last month that “We don’t want California to set the rules for AI across the country.” Sen. Ted Cruz, Texas Republican, told the same outlet that the moratorium is “not at all dead.” The House Energy and Commerce Committee has vowed to find a path forward and try again.
If Congress doesn’t act, Democratic-led states will be the ones to set the standard for our AI laws. That’s because when a state with a big enough market, such as California or New York, makes strict rules and regulations, AI companies will have no choice but to shape their tools and products to fit that state’s laws. That means, in practice, these big states are likely to stifle innovation for the rest of the country.
The madness won’t stop at just one set of regulations. Democratic-led states will strive to one-up one another to have the most control over tech companies. Just look at the legislation recently passed in Colorado. It’s red tape on steroids, and crippled innovation and a deserted marketplace will follow.
A messy patchwork of state AI laws wouldn’t just hurt businesses like mine. It also would slow down the broader economy. If companies are stuck navigating 50 different sets of rules, they will spend more money on attorneys than on innovation. That means fewer jobs, slower progress and less investment in the very technologies that can keep the U.S. ahead of China and Europe.
VoIP offers a cautionary tale. In 2004, the Federal Communications Commission’s Vonage preemption order concluded that nomadic interconnected VoIP could not practically be separated into intrastate and interstate traffic and therefore state entry, certification and similar economic regulation conflicted with federal policy and was preempted, a determination the 8th U.S. Circuit Court of Appeals upheld under the “impossibility” exception in Minnesota PUC v. FCC (2007).
Yet in the past few years, states, most notably California, have begun imposing licensing and registration, user fee, bonding and other obligations on VoIP providers, prompting industry petitions asking the FCC to reaffirm federal preemption. Although this patchwork makes no sense for nomadic VoIP, which is functionally interstate by design, states have nonetheless charged ahead.
The promise of AI is too important to leave to a fragmented system. If we get this right, we can unleash a wave of innovation that benefits small businesses, boosts local economies and keeps America competitive on the global stage. If we get it wrong, we risk burying entrepreneurs under red tape while the rest of the world races ahead.
I urge lawmakers to focus on creating one strong, smart federal framework. Let’s ensure technology is a tool for growth. Let’s start now. Congressional Republicans, it’s time to stop playing defense and put the state AI moratorium on the table in the government funding talks.
• David Casem is co-founder and CEO of Telnyx.
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