OpenAI Proposes "Reverse Federalism": Using US State Laws as the Foundation for National AI Rules

In July 2026, OpenAI published a programmatic article on its corporate blog about AI regulation in the US. The company proposes an approach it calls "reverse federalism": laws passed by individual states should become the building blocks of a nationwide framework for safe, democratic AI, not an obstacle to it.

What Is "Reverse Federalism"?

"Reverse federalism" is a bottom-up model of regulation. Instead of the federal center handing states ready-made rules, the states adopt AI laws first, and a single national standard gradually emerges from their practice. Classic federalism runs the other way: Washington sets the framework, and the 50 states fit into it. As the publication reads, OpenAI proposes treating state legislative activity as a resource for building federal rules, not as fragmentation that needs to be stopped.

• The approach is called "reverse federalism" — a term from the OpenAI blog
• According to the National Conference of State Legislatures (NCSL), AI bills were considered in all 50 states in 2025
• In September 2025, California passed SB 53, a law on transparency for frontier AI models
• Colorado and Texas enacted their own AI laws, which take effect in 2026

The debate over the division of powers intensified in the summer of 2025, when the US Senate voted 99 to 1 to strip from the budget package an amendment that would have imposed a ten-year moratorium on state AI regulation. The attempt to freeze state laws failed, and the question of who sets the rules for the industry remained open — OpenAI is now offering its answer to exactly that question.

Why Is OpenAI Betting on the States?

OpenAI views state laws as a testing ground where norms for future federal legislation are tried out: successful approaches can be scaled nationwide, while unsuccessful ones can be weeded out before they become national. It is a notable shift in emphasis: as recently as 2025, major AI companies, including OpenAI, lobbied for the primacy of federal rules and protection from a "patchwork" of state requirements.

"State laws help build a national framework for safe and democratic AI," the

OpenAI blog says.

The phrase "democratic AI" is no accident here: OpenAI regularly uses it in public documents to contrast technology development in democratic countries with authoritarian models of control. The company presents regulation through the elected legislatures of the states as part of the same line of argument.

How Are States Already Regulating AI?

Over the past two years, the states have become the main arena for AI regulation in the US. California's SB 53 requires large developers of frontier models to publish safety protocols and report incidents; Colorado and Texas have enacted their own AI acts, and dozens of other states have passed targeted rules, from labeling deepfakes to governing the use of AI in hiring.

OpenAI proposes treating precisely this body of laws as a draft of the national framework: the federal legislator would need only to synthesize the state norms that work, instead of writing rules from scratch. As long as Congress has no single AI law, "reverse federalism" in effect describes the reality that has already taken shape — and gives it the status of a deliberate strategy.

What It Means

OpenAI is publicly acknowledging that a single federal AI law is not coming to the US anytime soon, and instead of fighting the patchwork of state laws, it proposes turning that patchwork into the foundation of national rules. For comparison: the European Union took the opposite path — a single AI Act applies at once across all member countries; the US, if OpenAI's forecast proves correct, will get a national framework assembled from state laws. For developers and businesses, this is a signal: compliance will have to be built cumulatively — from the requirements of California and Colorado to a future federal standard.