Legal analysts say that despite active promotion by the White House, the likelihood of Congress passing a comprehensive artificial intelligence regulation bill this year remains very slim.

According to analysts who spoke with CFO Dive, the issue of preemption of state-level AI laws is one of several complex topics lawmakers need to address in advancing a broad federal bill. The upcoming midterm elections further add uncertainty to the outlook.

"The outlook is very bleak," said Ross Broudy, a cybersecurity and data privacy attorney at the Roanoke, Virginia-based law firm Woods Rogers Vandeventer Black. He noted that lawmakers have struggled for years to pass nationwide data privacy legislation, suggesting AI regulation may face similar resistance.

David Adams, an attorney at the law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, believes that theartificial intelligence proposalreleased by the White House earlier this month has not significantly improved the legislative outlook.

"In the short term, a comprehensive federal AI bill remains difficult to advance," he said. "A more realistic path is to enact narrower federal legislation on specific issues such as child safety, fraud, digital replicas, and workforce impacts, rather than trying to address the entire field in a single law."

As part of its legislative framework, the White House called on Congress to prioritize state-level AI laws to "avoid imposing undue burdens, ensure a national standard with minimal burden," while respecting "key principles of federalism." Under the plan, federal law should take the lead in areas such as establishing AI development and testing standards, and imposing extraterritorial obligations on businesses operating across state lines.

"Unfortunately, the White House framework fails to address key issues, including a lack of strong accountability for AI companies under the guise of protecting children, communities, and creators," said Josh Gottheimer, a Democratic congressman from New Jersey, ina statement. Gottheimer added that preemption "only makes sense if federal law can effectively replace existing state standards, and that standard is truly comprehensive and protects Americans."

The Democrat serves as vice chair of the House Problem Solvers Caucus, a self-described bipartisan group "committed to advancing common-sense solutions to key issues facing the nation."

Analysts say the disagreements over preemption reflect long-standing divisions that have hindered federal privacy legislation for years.

"There will be a fierce battle then," said Tyler Thompson, a partner at the law firm Reed Smith. He described tensions between lawmakers favoring a business-friendly federal framework and those wanting to preserve states' power to enforce stricter rules.

"This divide is not always strictly along party lines," he added. "You can't expect every Republican to support an AI-friendly bill because some hear from constituents who are skeptical of big tech. So, the situation is very complex."

Shawn Helms, a partner at the law firm McDermott Will & Schulte, also pointed to political obstacles. Some Republicans may resist federal efforts that could limit state power, even if others support national standards to avoid regulatory fragmentation. "At this point, some Republicans will feel very conflicted," he said.

Helms added that Congress has historically been reluctant to impose restrictive rules on emerging technologies, further lowering expectations for comprehensive legislation.

Natasha Allen, a partner at the law firm Foley & Lardner, said the outlook "may not be optimistic," pointing to the difficulty of crafting legislation that can keep pace with rapidly evolving technology."I do think the business community would certainly welcome a comprehensive unified approach," she said.

Lawyers say the lack of a unified federal AI standard could mean businesses will face ongoing compliance challenges.

"For CFOs, the real mistake would be sitting back and waiting for Washington to resolve the federal-state dispute before developing an AI compliance plan," Adams said.