Senate Takes Up Discussion of Federal AI Regulation

On March 18, 2026, Senator Marsha Blackburn released a discussion draft of her bill for AI regulation in line with President Trump’s Executive Order on AI.  We previously covered this Executive Order, here.  In line with the Executive Order, the discussion draft bill focuses on protection of children and copyrights in connection with AI development and deployment.  These provision include:

• Developers of chatbots that meet covered entity requirements (any entity engaged in the development, deployment or operation of AI, meeting thresholds established by the FTC – such as gross revenue over $500M, or data processing of more than1M individuals per year) must deploy reasonable care in the design, development, and operation of such chatbots. Further, the FTC will establish rules that set minimum safeguards for these covered entities.
• Any entity that owns, operates, or makes available an AI companion must use reasonable age verification to prevent access by children under 18.
• From a copyright perspective, the bill amends the fair use standard to provide that use of copyrighted materials to train, fine-tune, develop, or create AI is not fair use and would thus require the permission of the copyright holder.

The discussion draft also provides for reporting job effects that emanate from AI use.  This reporting requires covered entities (publicly-traded companies, certain federal agencies, and non-publicly traded companies designated by future regulation) to report within 30 days after the last day of each quarter statistics regarding AI impact, including:

• The number of employees laid off, or contracts of independent contracts that were cancelled, rescinded, or not renewed due, in whole or in part, to replacement or automation by AI.
• The number of employees hired, or contracts of independent contractors entered into due, in whole or in part, to AI.
• The number of positions not filled due to AI.

Finally, the draft provides for preemption of state laws that conflict with provisions the bill, but does allow for state laws that are more protective of minors than what is provided for in the bill. At this early stage, the likelihood of passage of the draft bill is unclear, but we will monitor for updates.  A copy of the discussion draft bill is available here.