For decades, America’s dominance in technology has rested on a simple but powerful principle: permissionless innovation—the idea that individuals and companies are free to build and experiment without first seeking government approval. This philosophy, which allows innovation by default unless clear harm is shown, unleashed breakthroughs from the personal computer to the internet, making the United States the global hub of technological progress.
Today, that legacy is under threat. In the rush to regulate artificial intelligence, lawmakers are distancing themselves from the very ethos that made the U.S. a global tech leader. The pace of proposed AI legislation is staggering. In 2024 alone, more than 600 AI-focused bills were introduced in state legislatures, followed by hundreds more at the beginning of 2025—driven less by evidence of harm than by anxiety and headline-fueled fears that AI would lead to job loss and even existential risk. Yet this surge of reactive policymaking threatens to undermine the very freedom that enabled American innovation.
America’s Tech Edge Is Under Threat — From Within
At the core of today’s AI debate is a fundamental clash of philosophies: permissionless innovation versus the precautionary principle. The former—long championed by the U.S.—favors experimentation and regulates only when tangible harm is evident. The latter—more common in the European Union—restricts deployment until innovators can prove safety, shifting the burden of proof from regulators to inventors. Although well-intentioned, this cautious approach has contributed to Europe’s technological stagnation, characterized by reduced competitiveness, higher costs, and slower innovation.
Now, that same approach is beginning to take hold in statehouses across the United States. Colorado, for example, has enacted sweeping AI model design mandates, akin to the European Union’s AI Act, that require developers in sectors such as education and finance to assess and mitigate algorithmic bias before deployment. Other states, including Virginia and Texas, are introducing similar proposals. These laws extend beyond policing outcomes; they impose design mandates, compliance checklists, and bureaucratic oversight across the entire innovation process.
At the federal level, President Trump’s revocation of Biden’s AI executive order signaled a clear federal pivot toward innovation and deregulation. Yet that hasn’t slowed the surge of restrictive state-level AI laws. His proposed 10-year moratorium on state AI regulation was rejected by the Senate, leaving behind a fragmented and confusing regulatory landscape. That patchwork carries real economic consequences: startups and small developers, unlike large tech firms, cannot absorb the escalating costs of legal reviews, audits, and compliance regimes. The result is a system that unintentionally entrenches dominant firms and starves the market of new entrants and new ideas.
What often goes overlooked is that the U.S. already has a robust legal framework to address genuine AI harms. Long-standing consumer protection laws, anti-discrimination statutes, and liability frameworks are sufficiently strong to address harms caused by AI. The Massachusetts Attorney General, for instance, has clarified that the state consumer protection laws apply to AI-generated outcomes. That’s the right approach: focus on the effects of technology, not the architecture behind it. AI is simply a tool; if it is used to discriminate, deceive, or cause harm, accountability should rest with those actions—not with the innovation itself.
The Freedom to Build: Why Innovation Thrives Without Permission
The claim that AI is advancing too rapidly has become a common justification for regulation. Yet rushing to regulate risks stifles innovation and entrenches bad policy. In fast-moving markets, patience is a strength; let real harms emerge before intervening, and let businesses answer to consumers, not bureaucrats.
We’ve seen this approach work before. In the landmark 1984 Sony Corp. v. Universal City Studios case (known as the Betamax case), the U.S. Supreme Court ruled that a technology should not be banned just because it could be misused. That decision enabled the VCR to flourish and paved the way for the home entertainment revolution. A decade later, the same principle was applied in the 1990s, when the Clinton administration chose to allow the internet to thrive in an unregulated, free-market environment, triggering one of the most significant innovation booms in history.
The results speak for themselves. According to the Boston Consulting Group, the U.S consistently dominates global innovation rankings. In 2013, seven of the top ten most innovative companies were American; by 2023, 16 of the top 25—including Amazon, Apple, Microsoft, and SpaceX—were based in the U.S. Meanwhile, Europe’s presence in the rankings has steadily declined or ceased to exist, a casualty of overregulation and risk aversion.
This divergence is no accident—it reflects two fundamentally different competing visions. One champions the freedom to create; the other demands permission to innovate. While calls to adopt Europe’s more cautious regulatory model may stem from good intentions—such as ensuring safety and oversight—they risk undermining the very conditions that enabled the U.S. to become a global innovation leader.
AI does not require a new regulatory philosophy—only a recommitment to one that already works. For decades, the United States has led by allowing innovation to move forward while holding actors accountable for real harm. Replacing that model with precautionary mandates would not make AI safer; it would make America less competitive. To remain a global innovation leader, policymakers must resist fear-driven regulation and preserve the freedom that has long fueled America’s technological advancement.
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