MSPAlliance Position Paper
Executive Summary
The rapid advancement of artificial intelligence (AI) technologies has sparked a national debate over the appropriate locus of regulatory authority in the United States. The objectives related to AI are clear: the United States (US) wants to become a dominant player in the AI game. To accomplish this objective, the US government must fashion a policy for AI growth and stability, while at the same time managing the often conflicting rights of the States to act legislatively on the issue of AI.
Federal preemption of state AI laws (implicating the Commerce Clause of the US Constitution) is increasingly proposed as a means to ensure national security, foster innovation, and maintain consistent standards. However, this approach raises significant legal, constitutional, and practical challenges, especially regarding data privacy, security, and the risk of offensive AI use by hostile actors.
Managed Service Providers (MSPs), as stewards of critical digital infrastructure, are uniquely positioned to support national cyber hygiene and compliance with evolving regulations, including AI implementation and management. This paper examines the motives behind federal preemption, the mechanisms and threats employed, legal and constitutional constraints, stakeholder reactions, policy trade-offs, and enforcement conflicts. It concludes with recommendations for balanced AI governance and the necessary inclusion and integration of MSPs in any regulatory framework.
Introduction
Artificial intelligence is transforming industries and national security alike. As AI systems become deeply embedded in critical infrastructure, healthcare, finance, and defense, the question of who should regulate AI—federal or state governments—has become urgent. For MSPs, who manage and secure IT environments across sectors, clarity and consistency in AI regulation directly impact their ability to protect data, comply with standards, and defend against cyber threats. National cyber hygiene, defined as the collective practices that safeguard digital systems, is foundational to both AI safety and the United States' competitive position in AI innovation. Put simply, there can be no dominance in AI until cybersecurity hygiene issues have been resolved.
