The Senate’s 99–1 July 1, 2025 vote to strip a proposed federal moratorium—and the bill’s enactment on July 4—confirmed that U.S. AI governance will remain a state-led patchwork. States such as California, Colorado, Texas, Utah and Maine retain enforcement authority, while the White House pivots to guidance and incentives rather than preemption. The outcome creates regulatory complexity for developers and multi-state businesses, risks uneven consumer protections across privacy, safety and fairness, and elevates certain states as de facto regulatory hubs whose models may be emulated or resisted. Policymakers now face choices between reinforcing fragmented state regimes or pursuing federal standards that must reckon with entrenched state prerogatives.