This update highlights key legislative and regulatory developments in the third quarter of 2026 related to artificial intelligence (“AI”), connected and automated vehicles (“CAVs”), and the Internet of Things (“IoT”).

I. Federal AI Legislative Developments

In the third quarter of 2026, members of Congress focused on several issues related to AI, including the costs and infrastructure demands of data centers, chatbot safety, the use of AI and other automated tools for pricing, and the oversight and governance of AI systems. For example:

• Data Centers. Lawmakers continued to scrutinize the growing energy and infrastructure demands associated with AI development. For example, the House passed Rep. Gabe Evans’ (R-CO) Ratepayer Protection Act (H.R. 9340), a bipartisan bill that would require certain data center operators to bear costs associated with infrastructure development rather than shifting those costs to ratepayers. The measure failed to advance in the Senate.

• Chatbot Safety. Congress also continued to advance proposals aimed at addressing the risks of AI chatbots, particularly for minors. Notably, the Senate Commerce Committee advanced several children’s online safety and AI bills, including Sen. Ted Cruz’s (R-TX) CHATBOT Act (S. 4407), which among other requirements, would require providers of AI chatbots to offer family accounts and obtain verifiable parental consent for teens.

• Algorithmic Pricing. Congress continued to focus on AI-driven “surveillance pricing.” On August 5, the Senate Judiciary Subcommittee on Crime and Counterterrorism, led by Sen. Josh Hawley (R-MO), held a hearing on these practices. Additionally, in the House, Rep. Greg Casar (D-TX), along with 43 cosponsors, introduced the Stop AI Price Gouging and Wage Fixing Act (H.R. 4640), which would prohibit the use of AI systems to inform individualized prices based on personal data.

• AI Safety and Governance. Lawmakers also devoted significant attention to oversight of advanced AI systems this quarter. For example, Rep. Ted Lieu (D-CA) introduced the AI Kill Switch Act (H.R. 9917), which would require entities that operate an AI system utilizing a certain quantity of computing power to maintain a shutdown capability. Similarly, Sen. John Kennedy (R-LA) introduced S. 5417, a bill that would require human-controlled shutdown mechanisms in all AI systems

II. Federal AI Regulatory and Executive Developments

In the third quarter of 2026, federal AI activity centered on AI-for-science priorities, consumer protection, cybersecurity vulnerability infrastructure, and the regulation of generative AI-enabled medical devices. For example:

• White House Expands the Genesis Mission and AI-for-Science Priorities. On July 21, the Assistant to the President and Director of the White House Office of Science and Technology Policy (“OSTP”) published a report to President Trump, titled “Science: A New Golden Age.” The report outlines recommendations to revitalize U.S. research and development (“R&D”) and identifies the Genesis Mission, the Administration’s initiative to use AI, federal scientific datasets, high-performance computing, and autonomous laboratories to accelerate scientific discovery, as a key federal R&D priority.

• President Trump Issues “Super Intelligence” Executive Order and Voluntary Safety Accord.  On September 29, President Trump issued Executive Order 14434, “Inaugurating the Era of Super Intelligence,” which directs the executive branch to use the terms “Super Intelligence” and “SI” in place of “Artificial Intelligence” and “AI.”  The Executive Order defines these terms by reference to the existing statutory definition of “Artificial Intelligence” under 15 U.S.C. § 9401(3), but it directs the Assistant to the President for Science and Technology to propose an updated legislative definition of “Super Intelligence.”  The same day, President Trump announced a White House Accord titled “Joint Commitment on Frontier Responsibilities.”  The Accord, signed by President Trump and representatives from Google, Anthropic, Meta, OpenAI, XAI, and Nvidia, includes commitments from these companies to implement controls and audits “to ensure that their technology behaves as intended and that any issues are promptly identified and resolved.”  The participating companies also agreed to meet regularly to establish standards and best practices to improve their systems’ safety.

• FTC Proposes AI Accuracy Policy Statement. On July 7, the Federal Trade Commission (“FTC”) published a proposed policy statement “Concerning the Suppression of Accuracy in Artificial Intelligence Systems,” with a request for public comment. The statement addresses the application of section 5 of the FTC Act to companies that market AI systems, noting that “an AI company might be tempted to alter or steer the output of its systems contrary to consumers’ reasonable expectations for various reasons,” in a way that is deceptive to consumers in violation of section 5.

• NIST Seeks Input on Modernizing the National Vulnerability Database for the AI Era. On August 12, the National Institute of Standards and Technology (“NIST”) published a Request for Information (“RFI”) on modernizing the National Vulnerability Database in light of AI-enabled cyber tools and increasing demand for machine-consumable security data. The RFI seeks input on how AI and automation could improve vulnerability identification, dissemination, prioritization, remediation, and data standards.

• FDA Seeks Feedback on Generative AI-Enabled Medical Devices. On August 18, the Food and Drug Administration (“FDA”) issued a discussion paper seeking feedback on regulatory considerations for generative AI-enabled medical devices, including risk assessment, premarket evaluation, postmarket monitoring, use of foundation models, and agentic AI systems. The Agency emphasized that the paper does not represent draft or final guidance but instead is intended to gather early stakeholder input on potential approaches to the regulation of GenAI-enabled medical devices. Comments due by October 19.

• FTC Finalizes Orders Over AI-Powered “Active Listening” Advertising Claims. On August 27, the FTC announced that it had finalized orders with three companies to resolve allegations that they deceived customers by incorrectly claiming to offer an AI-powered service that could target localized ads based on conversations captured from consumers’ smart devices and that consumers had opted into that targeting.

III. State AI Legislative Developments

State lawmakers enacted numerous AI laws during the third quarter of 2026, with over 20 bills enacted in California alone, described in our prior blog posts here and here. Additionally, state legislatures continued to expand the scope of their comprehensive privacy laws to address automated decisionmaking and related topics. Other key themes across legislative developments include:

• AI Companions. California enacted a set of AI bills, some of which focus on minors using and interacting with AI systems. For example, as previously described here, Adam’s Law (SB 1119) imposes restrictions on operators of companion chatbots in the state. Additionally, Hawaii enacted SB 3001, which requires operators of AI companions to issue certain disclosures and to establish protections for minor users.
• AI Transparency. During the third quarter, California Governor Gavin Newsom signed two amendments to the state’s AI Transparency Act, and Hawaii enacted HB 2137, which prohibits certain harmful uses of realistic digital imitations generated by AI.
• Chatbots. In addition to Adam’s Law in California and SB 3001 in Hawaii, California enacted new requirements for customer service chatbots and a prohibition on including companion chatbots in toys until 2031.

IV. Connected & Automated Vehicles

CAV legislative and regulatory activity in the third quarter focused on national security, emergency response and safety, and innovation.

• National Security. Federal legislators showed increased concern about national security threats posed by CAVs and foreign influence in the automotive industry more broadly. For example, on July 22, the Senate Commerce, Science, and Transportation Committee unanimously advanced the Connected Vehicle Security Act of 2026 (S. 4429), and on September 22, the Committee formally reported an amended version of the bill, which was placed on the Senate calendar. The bill builds on and expands the Department of Commerce Bureau of Industry and Security’s (“BIS”) 2025 Connected Vehicles Rule and would prohibit the import, manufacture, sale, or introduction into U.S. commerce of certain connected vehicles that are linked to China, Russia, Iran, or North Korea, or connected vehicles that incorporate hardware or software linked to these countries.

• Emergency Response and Safety. During the third quarter, federal regulators expressed concerns about interactions between autonomous vehicles (“AVs”) and first responders and called on the industry to address a recent pattern of AV-first responder issues. This concern was echoed by state legislative activity. For example, on July 8, National Highway Traffic Safety Administration (“NHTSA”) Administrator Jonathan Morrison issued a letter calling for developers of driverless automated driving systems to immediately focus on improving AV interactions with first responders. The letter noted a “recent, disturbing trend” of driverless AVs interfering with law enforcement and other first responders, as well as failing to recognize and respond to safety conditions like flashing lights, smoke, fire, and traffic cones. Additionally, California Governor Gavin Newsom signed SB 1246, which will require remote AV drivers to be U.S.-based and hold a driver’s license valid in California and will impose a number of obligations for AV-first responder interactions.

• Innovation. The Department of Transportation (“DOT”) and NHTSA took a number of steps in the third quarter to foster innovation, including unveiling a new national AV strategy and modernizing AV-related regulations. For example, in an interview the week of July 16, Administrator Morrison confirmed that NHTSA was planning to issue an Advance Notice of Proposed Rulemaking related to substantive standards for automated driving systems. Additionally, on July 30, NHTSA announced a number of significant AV-related actions. These actions included, among other things, requesting public comment on upcoming AV guidance; streamlining the Part 555 application process, through which automakers may receive temporary exemptions to sell a limited number of non-compliant vehicles (primarily to test new technologies); and publishing an interim final rule that allows the NHTSA Administrator to apply temporary exemptions to vehicles manufactured prior to the effective date of an exemption grant. On September 3, Transportation Secretary Sean Duffy announced the “Automated Vehicles National Strategy,” which is meant to “empower our innovators to build faster, smarter and safer than ever before.” Administrator Morrison said that the strategy “will provide for strict safety oversight, while unlocking the potential for AV technologies to be safely deployed on America’s roads.”

V. Internet of Things

In the third quarter, the Federal Communications Commission (“FCC”) took several IoT-related actions, including multiple significant updates to its Covered List.

• Updates to the Covered List. On July 28, following national security determinations by an Executive interagency body, the FCC updated its Covered List to add two new categories of foreign-produced devices: “advanced robotic devices” (including certain humanoid, quadruped, and other mobile robots meeting certain technical specifications) and connected power inverters. Previous updates had added foreign-produced uncrewed aircraft systems (“UAS”), UAS critical components, and routers to the Covered List. Since July 28, foreign-produced advanced robotic devices and inverter models have been ineligible to receive FCC equipment authorizations without a Conditional Approval from a designated Executive agency, though previously authorized models may continue to be imported, sold, and used in the U.S. The FCC has since published additional guidance and updates addressing both new categories, including to clarify that only inverters that can supply power to a utility are covered. The FCC has also announced that the Department of War has granted Conditional Approvals for specified lines of advanced robotic devices and power inverters from certain manufacturers.
• FCC Closes the “Component Part Loophole.” On July 22, the FCC adopted a Third Report and Order and Third Further Notice of Proposed Rulemaking. The Order prohibits equipment authorization for any device that incorporates logic-bearing hardware components produced by a Covered List entity if the device would be prohibited from authorization if produced by the Covered List entity itself. The Order also: (1) clarifies that marketing rules reach online marketplaces, which must now display the FCC ID at the point of sale; (2) requires full recertification for modifications or limited “permissive changes” made by a Covered List entity; and (3) adopts a narrower definition of “critical infrastructure” for purposes of the Covered List.
• FCC Proposes Hardware and Software Bills of Materials for Connected Devices. Separately, the FCC’s July 22 Third Further Notice of Proposed Rulemaking proposes requiring companies seeking equipment authorization for specified devices to submit signed hardware and software bills of materials detailing the origin and manufacturer of each component, with the goal of tightening supply-chain security.

We will continue to update you on meaningful developments in these quarterly updates and across our blogs.