The Evidence Gap: Why Courts Can't Balance State AI Regulation

• 45 states introduced 1,500+ AI bills by March 2026; courts can’t referee them.
  • Pike v. Bruce Church (1970) requires cost-benefit analysis courts lack data to run.
  • No threshold defined: is 2:1, 3:1, or 4:1 cost-to-burden ratio “clearly excessive”?
• xAI sued Colorado over its AI Act on dormant Commerce Clause grounds.
• State laws with extraterritorial reach are the fastest-growing constitutional flashpoint.
• Fix #1: mandate pre-enactment cost disclosures + 6–12 month post-enactment audits.
  • OIRA analyzes state laws; NIST/NTIA publish annual aggregate regulatory economics.
  • Commerce Dept builds anonymous corporate reporting portal for compliance cost data.
• Fix #2: build judicial capacity — ABA guidance, fellowships in chambers, NSF funding.
• Real risk is “Little Tech”: startups can’t absorb patchwork compliance; platforms can.

Jai Ramaswamy (a16z Chief Legal & Policy Officer) and Matt Perault (a16z Head of AI Policy) · 2026-04-14 · Read on a16z.com