South Carolina Pushes for AI Regulation Amid Federal Tensions

South Carolina is stepping into the national spotlight as it prepares to tackle artificial intelligence (AI) regulation ahead of its upcoming legislative session. The move sets the stage for a potential clash with federal policy, as President Donald Trump’s executive order seeks to block state-level AI oversight. At the heart of the debate are growing concerns about the risks AI poses, particularly in sensitive areas like mental health and child safety.

The South Carolina Small Business Chamber of Commerce is leading the charge, arguing that immediate state action is necessary to address the rapid advancement of AI technologies. Frank Knapp, the Chamber’s president and CEO, has highlighted the urgent need for regulation, citing fears that AI could be used to exploit children or exacerbate mental health issues among adults seeking emotional support from AI chatbots.

State vs. Federal AI Regulation

The push for AI regulation in South Carolina comes as the state joins a growing number of others—47 in total—that are considering or have already introduced bills to manage AI use within the healthcare space. However, the state’s efforts are complicated by Trump’s executive order, which aims to maintain U.S. leadership in AI by preventing states from imposing their own regulations. This has set the stage for a potential legal battle between states and the federal government, as local leaders argue that they cannot wait for federal action to address the immediate risks associated with AI.

"We just can’t wait for down the road. It’s all happening now, and it’s up to the states," Knapp said, emphasizing the urgency of the situation. He also expressed skepticism about the likelihood of Congress passing meaningful AI regulation in the near future, stating, "Congress is not going to do anything to regulate the negatives out of AI."

The Risks of Unregulated AI

One of the key concerns driving the push for AI regulation is the potential for AI to cause harm in mental health applications. Charleston resident Will Vandergrift, a supporter of the regulation efforts, argued that AI should not be used as a mental health provider, as it cannot replace the nuanced expertise of human professionals. "I don’t think you can replace a human’s expertise with something as nuanced as the human psyche," Vandergrift said.

Knapp echoed these concerns, warning that AI could be used to groom children for sexual exploitation or encourage self-harm, including suicide. He also highlighted the risks for adults who seek emotional counseling from AI chatbots, which may lack the empathy and understanding needed to provide effective support. "That is a serious problem," Knapp said.

The debate underscores a broader tension between the benefits and risks of AI. While the technology has the potential to revolutionize industries and improve efficiency, its rapid development has outpaced regulatory frameworks, leaving many concerned about its unintended consequences.

As South Carolina moves forward with its legislative efforts, it will likely face legal challenges from the federal government. The outcome of this battle could have far-reaching implications for how AI is regulated across the United States, as states and federal authorities grapple with how to balance innovation with safety and ethical considerations.