This report research by Covington Law provides an overview of major legislative, regulatory, and litigation developments during the first quarter of 2025, with a focus on artificial intelligence (AI), connected and automated vehicles (CAVs), and blockchain-based technologies including cryptocurrencies.
I. Artificial Intelligence (AI)
A. Federal Legislative Developments
During Q1 2025, Congress introduced and advanced numerous AI-related bills targeting national security, critical infrastructure, workforce development, supply chain resilience, and consumer protection. Bipartisan attention focused on deepfake regulation and formalizing AI research resources.
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Deepfake Regulation:
In February, the Senate passed the TAKE IT DOWN Act (S. 146), which prohibits the non-consensual distribution of AI-generated intimate imagery and mandates removal by hosting platforms. A companion bill (H.R. 633) is currently under review by the House Energy & Commerce Committee. -
CREATE AI Act:
In March, Reps. Jay Obernolte (R-CA) and Don Beyer (D-VA) reintroduced the Creating Resources for Every American To Experiment with Artificial Intelligence (CREATE AI) Act (H.R. 2385). This bill would codify the National AI Research Resource (NAIRR), expanding access to computing power, datasets, and AI testbeds for public and private sector innovation.
B. Federal Regulatory Developments
Following President Trump’s return to office, federal AI policy shifted significantly, emphasizing deregulation and national AI dominance.
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Executive Orders:
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EO 14148 (Jan 20): Revoked the Biden-era EO 14110, dismantling prior AI risk frameworks.
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EO 14179 (Jan 23): Directed agencies to create an “AI Action Plan” to advance American leadership in AI.
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OSTP RFI: On Feb 6, the White House sought public comment on 20 AI-related topics; the consultation closed Mar 15.
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Department of Commerce:
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Entity List Expansion (Mar 25): BIS added 80 foreign entities (including from China, UAE, and Iran) to the list, restricting access to U.S. AI technologies for military use.
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AI Diffusion Rule: Finalized in January, effective May 15, this rule strengthens export controls on advanced chips and AI models.
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NIST:
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Released a concept paper on a new Cyber AI Profile (Feb 14) to manage risks in AI-powered cybersecurity.
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Published its final Adversarial Machine Learning report (Mar 24) offering voluntary safeguards for AI robustness.
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Federal Trade Commission:
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DoNotPay: Final ruling issued (Feb 11) over false advertising of a “robot lawyer” service.
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Evolv Technologies Settlement (Mar 11): Resolved deceptive marketing allegations tied to AI-powered security claims.
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New Commissioner: Mark Meador confirmed (Apr 10), advocating stronger FTC oversight of AI-related consumer harms and monopolistic behavior.
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Copyright Office:
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AI & Copyright Report – Part 2 (Jan 29): Reaffirmed that AI-generated content is not eligible for copyright unless meaningful human authorship is involved.
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Securities & Exchange Commission (SEC):
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Cyber and Emerging Technologies Unit (CETU): Launched Feb 20 to enforce actions against fraud involving AI and emerging tech.
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Department of Defense:
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Partnered with BigBear.ai (Feb 5) to develop AI tools for geopolitical threat analysis.
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C. State Legislative Developments
In Q1 2025, state lawmakers introduced hundreds of AI bills addressing discrimination, deepfakes, digital impersonations, and the use of generative AI in political contexts.
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Consumer Protection & Discrimination:
Virginia’s HB 2094 (High-Risk AI Developer & Deployer Act) was vetoed by Governor Glenn Youngkin due to concerns over regulatory burdens on startups. -
Synthetic Content & Deepfakes:
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Montana (HB 82) and South Dakota (SB 164) banned possession and dissemination of AI-generated CSAM and election-related deepfakes.
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Kentucky (SB 4) mandated AI content disclosures in political advertising.
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Generative AI & Chatbot Regulation:
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Utah (HB 452, SB 226): Enacted rules on AI chatbot transparency, health data handling, and disclosure of AI-generated outputs in sensitive scenarios.
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Digital Replicas & Identity Rights:
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Utah (SB 271) and Arkansas (HB 1071): Criminalized unauthorized commercial use of AI-generated impersonations and likenesses.
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Criminalization of Synthetic Media Use:
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Virginia (HB 2124) and New Jersey (A 3540): Imposed criminal penalties for using AI-generated content in fraudulent or criminal acts.
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Frontier Model Regulation:
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Montana (SB 212): Enacted the Right to Compute Act, imposing safety obligations on AI systems controlling critical infrastructure.
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California (SB 53): Introduced whistleblower protections for employees in foundation model development. A draft regulatory report was issued in March by the state’s AI Working Group.
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II. Connected & Automated Vehicles (CAVs)
The transition between the Biden and Trump Administrations has generated uncertainty around recent CAV regulatory initiatives. Key agency leadership changes include the confirmation of Sean Duffy as Secretary of Transportation (Jan 28) and the nomination of Jonathan Morrison to lead NHTSA (Feb 11).
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BIS Final Rule on CV Supply Chain (Jan 14):
Banned the import or sale of connectivity hardware/software from China and Russia. President Trump’s America First Trade Policy Memorandum (Jan 20) called for further review and potential expansion to additional connected technologies. -
NHTSA's AV STEP Proposal (Jan 15):
Introduced a voluntary program for manufacturers and AV developers to disclose technical information and request regulatory exemptions. The public comment period closed on Mar 17. -
FTC Action Against GM & OnStar (Jan 16):
Proposed order alleges deceptive collection and use of geolocation and behavioral data without adequate consumer notice or consent.