The State of Artificial Intelligence in the United States


Executive Summary

Artificial Intelligence (“AI”)[1] has moved rapidly in the last decade; so has the debate around its potential implications.[2] Today, AI is part of our daily life ­– from getting renter’s insurance[3] to using the fast lane while going through TSA.[4] Despite AI’s prevalence, the federal government’s involvement has been limited in addressing the most significant issues around AI. This may be changing soon.

Current Framework in the US

AI has gained the attention of Congress[5] and the White House,[6] but no comprehensive federal regulation currently exists.[7] The Trump administration issued the first AI regulatory guidance in 2019,[8] encouraging agencies to take a risk-based and non-regulatory approach when addressing issues around AI.[9] The Biden administration has largely taken the same position.[10] Under the National Defense Authorization Act of 2021, the National Initiative on Artificial Intelligence was passed by Congress.[11] The Act seeks to establish a framework and coordinate the use of AI across federal agencies rather than impose specific obligations on the use of AI more generally.[12]

By contrast, states have taken steps to regulate the general use of AI and specific AI technologies, such as facial recognition and autonomous vehicles.[13] In 2019, the Illinois State Legislature passed the Artificial Intelligence Video Interview Act[14] (“AIVIA”) aimed at the use of AI by employers when conducting video interviews of applicants for positions based in Illinois.[15] More recently, the Colorado General Assembly passed S.B. 169,[16] which restricts insurers from using external consumer data, algorithms, or predictive models that unfairly discriminate against individuals based on protected grounds.[17]

What’s Coming Next?

Some federal regulation on the use of AI is imminent, but it will likely happen through an agency by agency basis and by using existing federal laws.[18] The federal government has issued several Requests for Information (“RFIs”) to gather comments from the public about the use of AI. Based on the RFIs, agencies will likely focus on bias, fairness, transparency, and explainability.[19] Most recently, the largest financial federal regulators issued a joint RFI about the use of AI within the financial services industry,[20] hinting that future regulation in this sector is likely. The RFI sought to understand how financial institutions are currently using AI and managing its risks, specifically when it comes to issues like explainability, bias, overfitting[21], and fairness.[22]

Recent Actions by the FTC

The Federal Trade Commission’s (FTC) recent guidance and settlement with Everalbum, Inc., (“Ever”) may provide insight into the type of regulation and enforcement that can be expected from other federal agencies. In 2020, the FTC issued business guidance focused on AI and algorithms.[23] The guidance stated that the use of AI should be transparent, explainable, fair, empirically sound, and accountable.[24] It was followed by an FTC blog post titled “Aiming for Truth, Fairness, and Equity in your Company’s Use of AI”[25] and remarks by its Chairman, Rebecca Slaughter, about going after companies whose AI technology causes harm to consumers[26]. The FTC asserts its jurisdiction over AI under Section 5 of the FTC Act, the Federal Credit Reporting Act, and the Equal Credit Opportunity Act.[27]

In January 2021, the FTC reached a settlement with Ever, a photo app developer.[28] According to the complaint, Ever deceived its users about its facial recognition software and its data retention for users who had deleted their accounts.[29] Specifically, the FTC argued that Ever used pictures uploaded by customers through its app to train its facial recognition technology and, in some cases, did so without users’ consent.[30] It also alleged that Ever had failed to erase photographs and videos of users who had canceled their accounts, keeping them indefinitely.[31] This was the FTC’s first enforcement action directed at the use of facial recognition software technology.[32] The settlement forced Ever to delete the data it had collected through its app without the users’ consent and to destroy any facial recognition models or algorithms that it developed using such data.[33] This remedy was the first of its kind and will likely become a powerful tool for agencies when it comes to enforcement.

In November 2021, Meta (formerly known as Facebook) announced it was shutting down its facial recognition program and deleting the facial recognition template used to identify people’s faces in pictures and videos.[34] The decision comes amid the scrutiny of the company by the public and Congress.[35]


Despite the passage of the National Initiative on AI, an overarching federal framework to regulate the use of AI seems unlikely any time soon. However, an agency by agency approach using existing laws and its enforcement tools, such as that shown by the FTC, could still have important implications for the future.

[1] See National Artificial Intelligence Initiative Act, 15 U.S.C. § 9411 (2021) (“‘[A]rtificial intelligence’ means a machine-based system that can, for a given set of human-defined objectives, make predictions, recommendations, or decisions influencing real or virtual environments.”).

[2] See Christina Pazzanese, Ethical Concerns Mount as AI Takes Bigger Decision-making Role in More Industries, Harv. Gazette (Oct. 26, 2020),

[3] See Tom Taulli, Lemonade IPO Shows The Power Of AI (Artificial Intelligence), Forbes (Jul. 3, 2020),

[4] See CLEAR, (last visited Nov. 3, 2021).

[5] See The AI Index Report: Measuring Trends in Artificial Intelligence, Stan. Univ., (last visited Nov. 3, 2021) (“The 116th Congress was the most AI-focused congressional session in history with number of mentions of AI in congressional record more than triple that of the 115th Congress.”).

[6] See Benjamin Din, White House, Lawmakers Brainstorm AI Ground Rules, Politico (Oct. 12, 2021, 10:00 AM),

[7] See Catherine Zhu et al., United States: Artificial Intelligence Comparative Guide, Mondaq (Apr. 21, 2021),

[8] See Off. of Mgmt. & Budget, Exec. Off. of The President, M-21-06, Guidance for Regulation of Artificial Intelligence Application (2020).

[9] See Katori Rameau & K.C. Halm, White House Finalizes AI Regulatory Framework and Directs Agencies to Develop Plans for AI Regulation and “Non Regulation”, David Wright Tremaine LLP (Dec. 10, 2020),; Alex Engler, New White House Guidance Downplays Important AI Harms, Brook. Inst. (Dec. 8, 2020),

[10] See H. Mark Lyon et al., Artificial Intelligence and Automated Systems Legal Update (2Q21), Gibson Dunn (Aug. 11, 2021),

[11] See 15 U.S.C. § 9411 (2021).

[12] The National Artificial Intelligence Initiative Act of 2020, passed under the National Defense Authorization Act of 2021, established a framework to ensure and continue the country’s leadership on AI’s research and development, prepare the present and future workforce in the US across all sectors and coordinate AI research and policy across the agencies in the federal government. See National Artificial Intelligence Initiative Act, supra note 1.

[13] See Legislation Related to Artificial Intelligence, Nat’l Conf. of State Leg. (Sep. 15, 2021),

[14] 820 Ill. Comp. Stat. 42/1-20 (2020).

[15] See Jeffrey Bosley et al., Employers Using AI in Hiring Take Note: Illinois’ Artificial Intelligence Video Interview Act Is Now in Effect, JD Supra (Feb. 11, 2020),

[16] Colo. Rev. Stat. § 10-3-1104.9 (2021).

[17] Id.

[18] See Lyon, supra note 10.

[19] See, e.g., Request for Information and Comment on Financial Institutions’ Use of Artificial Intelligence, Including Machine Learning, 86 Fed. Reg. 16,837 (Mar. 31, 2021); Artificial Intelligence Risk Framework, 86 Fed. Reg. 40,810 (Jul. 29, 2021); Request for Information and Comments on Broker-Dealer and Investment Adviser Digital Engagement Practices, Related Tools and Methods, and Regulatory Considerations and Potential Approaches; Information and Comments on Investment Adviser Use of Technology To Develop and Provide Investment Advice, 86 Fed. Reg. 49,087 (Sep. 1, 2021).

[20] See Request for Information and Comment on Financial Institutions’ Use of Artificial Intelligence, Including Machine Learning, 86 Fed. Reg. 16,837 (Mar. 31, 2021) [hereinafter, March 31 RFI].

[21] See March 31 RFI, supra note 19 (“‘Overfitting’ can occur when an algorithm ‘learns’ from idiosyncratic patterns in the training data that are not representative of the population as a whole . . . [u]ndetected overfitting could result in incorrect predictions or categorizations.”).

[22] See Andrew Burt, New AI Regulations Are Coming. Is Your Organization Ready?, Harv. Bus. Rev. (Apr. 30, 2021),

[23] See Andrew Smith, Using Artificial Intelligence and Algorithms, FTC: Bus. Blog (Apr. 8, 2020),

[24] See Avi Gesser, The Future of AI Regulation (Part 3): The FTC’s New Guidance On Using AI Truthfully, Fairly and Equitably, Debevoise & Plimpton (May 3, 2021),

[25] See Elisa Jillson, Aiming for Truth, Fairness, and Equity in your Company’s Use of AI, FTC: Bus. Blog (Apr. 19, 2021),

[26] See Rebecca Slaughter, Acting Chairwoman, Fed. Election Comm’n, Remarks at the Future of Privacy Forum: Protecting Consumer Privacy in a Time of Crisis (Feb. 10, 2021) (available at

[27] See Bret Cohen et al., FTC Authority To Regulate Artificial Intelligence, Reuters (Jul. 8, 2021, 1:26 PM),

[28] See Press Release, Fed. Trade Comm’n, FTC Finalizes Settlement with Photo App Developer Related to Misuse of Facial Recognition Technology (May 5, 2021) (available at

[29] See Complaint at 1-5, In the Matter of Everalbum, Inc., 2021 WL 1922377 (F.T.C. May 6, 2021).

[30] Id. at 2-3.

[31] Id. at 3-4.

[32] See Janis Claire Kestenbaum et al., Everalbum Settles FTC Claims Alleging Deceptive Use of Facial Recognition Technology, Perkins Coie (Jan. 29, 2021),

[33] See Press Release, Fed. Trade Comm’n, California Company Settles FTC Allegations It Deceived Consumers about use of Facial Recognition in Photo Storage App (Jan. 11, 2021), available at

[34] See Salvador Rodriguez, Facebook Plans to Shut Down Its Facial Recognition Program, CNBC (Nov. 3, 2021, 3:00 PM),

[35] See Matthew Brown & Jessica Guynn, Facebook Whistleblower Fires Up Congress: Is This Mark Zuckerberg’s Moment Of Reckoning?, USA Today (Oct. 7, 2021, 2:58 PM),


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Fordham Journal of Corporate & Financial Law