This quarterly update highlights key legislative, regulatory, and litigation developments in the first quarter of 2025 related to artificial intelligence (“AI”), connected and automated vehicles (“CAVs”), and cryptocurrencies and blockchain. 

I. Artificial Intelligence

A. Federal Legislative Developments

In the first quarter, members of Congress introduced several AI bills addressing national security, including bills that would encourage the use of AI for border security and drug enforcement purposes.  Other AI legislative proposes focused on workforce skills, international investment in critical industries, U.S. AI supply chain resilience, and AI-enabled fraud.  Notably, members of Congress from both parties advanced legislation to regulate AI deepfakes and codify the National AI Research Resource, as discussed below.

  • CREATE AI Act:  In March, Reps. Jay Obernolte (R-CA) and Don Beyer (D-VA) re-introduced the Creating Resources for Every American To Experiment with Artificial Intelligence (“CREATE AI”) Act (H.R. 2385), following its introduction and near passage in the Senate last year.  The CREATE AI Act would codify the National AI Research Resource (“NAIRR”), with the goal of advancing AI development and innovation by offering AI computational resources, common datasets and repositories, educational tools and services, and AI testbeds to individuals, private entities, and federal agencies.  The CREATE AI Act builds on the work of the NAIRR Task Force, established by the National AI Initiative Act of 2020, which issued a final report in January 2023 recommending the establishment of NAIRR.

Continue Reading U.S. Tech Legislative & Regulatory Update – First Quarter 2025

This is part of an ongoing series of Covington blogs on the AI policies, executive orders, and other actions of the Trump Administration.  This blog describes AI actions taken by the Trump Administration in March 2025, and prior articles in this series are available here.

White House Receives Public Comments on AI Action Plan

On March 15, the White House Office of Science & Technology Policy and the Networking and Information Technology Research and Development National Coordination Office within the National Science Foundation closed the comment period for public input on the White House’s AI Action Plan, following their issuance of a Request for Information (“RFI”) on the AI Action Plan on February 6.  As required by President Trump’s AI EO, the RFI called on stakeholders to submit comments on the highest priority policy actions that should be in the new AI Action Plan, centered around 20 broad and non-exclusive topics for potential input, including data centers, data privacy and security, technical and safety standards, intellectual property, and procurement, to inform an AI Action Plan to achieve the AI EO’s policy of “sustain[ing] and enhance[ing] America’s global AI dominance.”

The RFI resulted in 8,755 submitted comments, including submissions from nonprofit organizations, think tanks, trade associations, industry groups, academia, and AI companies.  The final AI Action Plan is expected by July of 2025.

NIST Launches New AI Standards InitiativesContinue Reading March 2025 AI Developments Under the Trump Administration

In a new post on Cov Africa, our colleagues discuss the release of Kenya’s National Artificial Intelligence Strategy (2025–2030), a landmark document on the continent that sets out a government-led vision for ethical, inclusive, and innovation-driven AI adoption.

Continue Reading Kenya’s AI Strategy 2025–2030: Signals for Global Companies Operating in Africa

On April 3, the White House Office of Management and Budget (“OMB”) released two memoranda with AI guidance and requirements for federal agencies, Memorandum M-25-21 on Accelerating Federal Use of AI through Innovation, Governance, and Public Trust (“OMB AI Use Memo“) and Memorandum M-25-22 on Driving Efficient Acquisition of Artificial Intelligence in Government (“OMB AI Procurement Memo”).  According to the White House’s fact sheet, the OMB AI Use and AI Procurement Memos (collectively, the “new OMB AI Memos”), which rescind and replace OMB memos on AI use and procurement issued under President Biden’s Executive Order 14110 (“Biden OMB AI Memos”), shift U.S. AI policy to a “forward-leaning, pro-innovation, and pro-competition mindset” that will make agencies “more agile, cost-effective, and efficient.”  The new OMB AI Memos implement President Trump’s January 23 Executive Order 14179 on “Removing Barriers to American Leadership in Artificial Intelligence” (the “AI EO”), which directs the OMB to revise the Biden OMB AI Memos to make them consistent with the AI EO’s policy of “sustain[ing] and enhance[ing] America’s global AI dominance.” 

Overall, the new OMB AI Memos build on the frameworks established under President Trump’s 2020 Executive Order 13960 on “Promoting the Use of Trustworthy Artificial Intelligence in the Federal Government” and the Biden OMB AI Memos.  This is consistent with the AI EO, which noted that the Administration would “revise” the Biden AI Memos “as necessary.”  At the same time, the new OMB AI Memos include some significant differences from the Biden OMB’s approach in the areas discussed below (as well as other areas).Continue Reading OMB Issues First Trump 2.0-Era Requirements for AI Use and Procurement by Federal Agencies

The “market” for AI contracting terms continues to evolve, and whilst there is no standardised approach (as much will depend on the use cases, technical features and commercial terms), a number of attempts have been made to put forward contracting models. One of the latest being from the EU’s Community of Practice on Public Procurement of AI, which published an updated version of its non-binding EU AI Model Contractual Clauses (“MCC-AI”) on March 5, 2025. The MCC-AI are template contractual clauses intended to be used by public organizations that procure AI systems developed by external suppliers.  An initial draft had been published in September 2023.  This latest version has been updated to align with the EU AI Act, which entered into force on August 1, 2024 but whose terms apply gradually in a staggered manner.  Two templates are available: one for public procurement of “high-risk” AI systems, and another for non-high-risk AI systems. A commentary, which provides guidance on how to use the MCC-AI, is also available.Continue Reading EU’s Community of Practice Publishes Updated AI Model Contractual Clauses

Today the White House released an executive summary of the policy reviews President Trump ordered in his America First Trade Policy (AFTP) memorandum, issued on January 20.  Although the full report to the President is nonpublic, according to the executive summary it contains twenty-four chapters, organized into three main pillars: (1) Addressing Unfair and Unbalanced Trade, (2) Economic and Trade Relations with the People’s Republic of China, and (3) Additional Economic Security measures, which includes reviews of export control programs, outbound investment, and other national security policies.

Several of these reviews directly affect the technology industry broadly.  Although the executive summary contains little specific policy detail on these key issues, it does provide an overview of the Administration’s findings and next steps:Continue Reading Agencies Deliver America First Trade Policy Recommendations to White House

Four Internet of Things (IoT) related tax relief provisions are due to expire on December 31, 2025.  Two bills were introduced in Brazil’s National Congress to extend these provisions and are currently in debate under a fast-track rule.  Companies that provide and implement IoT projects can engage congressional leaders to secure the bills’ approval.

Tax Relief Provisions

The Brazilian Internet of Things Act of 2020 reduced to zero four fees and contributions for companies implementing and operating IoT projects:

  • The Installation Oversight Fee (“TFI”), due when the authorization is granted to operate IoT stations;
  • The Operation Oversight Fee (“TFF”), due annually;
  • The Public Broadcasting Support Contribution (“CFRP”), due annually; and
  • The National Film Production Development Contribution (“Condecine”), due annually.

Some of these fees and contributions, as well as roaming-related restrictions to international IoT providers, are listed in the Brazil section of the Office of the United States Trade Representative 2024 National Trade Estimate Report on Foreign Trade Barriers.Continue Reading Brazil’s Internet of Things Tax Relief Due to Expire in 2025

On March 24, the Senate Judiciary Subcommittee on the Constitution held a hearing on the “Censorship Industrial Complex,” where senators and witnesses expressed divergent views on risks to First Amendment rights.  Senator Eric Schmitt (R-MO), the Subcommittee Chair, began the hearing by warning that the “vast censorship enterprise that the Biden Administration built” has expanded into an “alliance of activists, academics, journalists, big tech companies, and federal bureaucrats” that uses “novel tools and technologies of the 21st century” to silence critics.  Senator Peter Welch (D-VT), the Ranking Member of the Subcommittee, expressed skepticism about alleged censorship by the Biden Administration and social media companies, citing the Supreme Court’s 2024 opinion in Murthy v. Missouri, and accused the Trump Administration of causing “real suppression of free speech.”

The witnesses at the hearing, including law professors, journalists, and an attorney from the Reporters Committee for Freedom of the Press, expressed contrasting views on the state of free expression and risks of censorship.  Mollie Hemingway, the Editor-in-Chief of The Federalist, argued that federal and state governments “fund and promote censorship and blacklisting technology” to undermine free speech in coordination with universities, non-profit entities, and technology companies.  Jonathan Turley, a George Washington University law professor, and Benjamin Weingarten, an investigative journalist, raised similar censorship concerns, with Turley arguing that a “cottage industry of disinformation experts” had “monetized censorship” and adding that the EU’s Digital Services Act presents a “new, emerging threat” to First Amendment rights.Continue Reading Senate Judiciary Subcommittee Holds Hearing on the “Censorship Industrial Complex”

On March 18, the Joint California Policy Working Group on AI Frontier Models (the “Working Group”) released its draft report on the regulation of foundation models, with the aim of providing an “evidence-based foundation for AI policy decisions” in California that “ensure[s] these powerful technologies benefit society globally while reasonably managing emerging risks.”  The Working Group was established by California Governor Gavin Newsom (D) in September 2024, following his veto of California State Senator Scott Wiener (D-San Francisco)’s Safe & Secure Innovation for Frontier AI Models Act (SB 1047).  The Working Group builds on California’s partnership with Stanford University and the University of California, Berkeley, established by Governor Newsom’s 2023 Executive Order on generative AI.

Noting that “foundation model capabilities have rapidly improved” since the veto of SB 1047 and that California’s “unique opportunity” to shape AI governance “may not remain open indefinitely,” the report assesses transparency, third-party risk assessment, and adverse event reporting requirements as key components for foundation model regulation.Continue Reading California Frontier AI Working Group Issues Report on Foundation Model Regulation

On March 12, the U.S. Senate Committee on Commerce, Science, and Transportation advanced two nominations key to the Trump Administration’s technology policy: Mark Meador as a Commissioner for the Federal Trade Commission (“FTC”), and Michael Kratsios as Director of the White House Office of Science and Technology Policy (“OSTP”).  Both nominees previously had their nomination hearings in front of the Committee on February 25, described below.

Mark Meador

Meador started his career in the healthcare division of the FTC.  In his opening statement, he discussed the importance of the FTC in protecting consumers and free market competition. He specifically referenced the need to protect children in the digital environment and stated that the FTC should use its consumer protection powers to safeguard families.

During the nomination hearing, Meador faced questions about consumer protection enforcement mechanisms, “Big Tech” regulation, pharmacracy benefit managers (“PBMs”), antitrust concerns, and the agency’s direction under the new administration.Continue Reading Senate Commerce Committee Questions Trump Tech Nominees