OpenAI Pursues Reverse Federalism: State-by-State AI Governance Strategy

OpenAI's chief global affairs officer Chris Lehane publicly outlined a 'reverse federalism' strategy on May 20, describing the company's effort to shape AI governance through aligned state legislation.

Rather than waiting for federal AI regulation, OpenAI is actively working to create a de facto national baseline assembled from consistent state-level laws.

Strategy components:

- OpenAI has endorsed AI safety laws in California and New York - Active support for an Illinois AI safety bill requiring frontier labs to submit to third-party audits - Same audit framework already enacted in California and New York - Anthropic is also engaged in Illinois, backing a competing bill with different provisions

OpenAI frames the approach as state leadership building momentum for federal action: states establish a common baseline, creating political and commercial pressure for Congress to harmonize nationally.

The strategy represents a significant shift from the standard tech industry playbook of opposing AI regulation. It reflects a calculated bet that being seen as a governance leader is commercially and politically more valuable than regulatory minimalism.

The risk is a fragmented outcome: if the three state laws pass with different audit requirements, liability frameworks, and enforcement mechanisms, OpenAI will have shaped a patchwork rather than a baseline.

AI governance professionals in the US should track the Illinois AI safety bill closely. It may become the third leg of what functions as the de facto national AI governance framework.

Why It Matters: OpenAI's strategy creates a tension between industry-led governance and regulatory coherence. If successful, three aligned state laws could function as a national baseline; if not, enterprises face a compliance patchwork.