Why American AI Could Die in Court Before It Ever Takes Off

“Uh oh—have you guys completed your income tax? Things kind of happened real fast down there, and I need an extension.”
—Apollo 13 astronaut Jack Swigert

Even in space, Americans worry about taxes. That’s not a screenwriter’s joke. Hours before Apollo 13 almost ended in disaster, astronaut Jack Swigert, called in as a last-minute replacement, wasn’t worried about launch. He was worried about filing his taxes.

Only in America could bureaucracy follow you into orbit.

That story says everything about our national identity. We cherish the rule of law. We believe in due process. But in the race to lead in artificial intelligence, it’s becoming clear: The very systems we treasure may be the ones slowing us down.

The 2 Biggest Threats to US Artificial Intelligence Leadership

Right now, America is out front in both generative AI (which predicts content) and agentic AI (which makes autonomous decisions). But two very American forces are putting that lead at risk:

(1) A regulatory Rubik’s Cube.
Congress recently passed the One Big Beautiful Bill Act to jumpstart AI innovation. But it stripped out a crucial provision: a 10-year moratorium on conflicting state-level AI laws.

Now, companies face 50 different interpretations of what AI is allowed to do. Some states require bias audits. Others impose disclosure mandates. A tool that’s legal in Florida could get fined in California. Even top-tier compliance lawyers can’t map it all out fast enough.

Because AI models cross state lines the moment they’re deployed, this isn’t just inefficient, it’s paralyzing.

(2) A litigation gold rush.
Trial lawyers have found their next deep-pocketed target: AI.

I say this as someone who used to be one of them and now defends companies against the legal risks of AI deployment. Lawsuits are already moving. The most prominent? A federal case against UnitedHealthcare, accusing the company of using AI to deny long-term care without sufficient human oversight.

And that’s only the beginning.

The playbook is already forming. Here are the claims AI developers are now defending against:

• Product liability for algorithmic defects.
• Failure to warn about tool misuse.
• Discrimination based on automated decisions.
• Negligence for not keeping a “human in the loop.”

In America, you don’t have to prove intent. Just tie the harm to an AI tool and let a jury decide. Today, every AI developer is one bad headline away from a class action lawsuit.

Let’s be clear: Our legal system is the envy of the world. But when lawsuits are filed before laws are even written, we aren’t protecting consumers, we’re punishing innovators for playing on a field without any lines drawn.

China Doesn’t Have to Worry About This

Let me be crystal clear: We do not want China’s system. We don’t want central planning. We don’t want censorship. And we don’t want a government-controlled tech industry.

But it would be naive to pretend China faces the same friction.

Yes, they have courts. But they don’t have:

• Billboards from class action lawyers.
• Contingency-fee lawsuits built around algorithmic outcomes.
• Juries “sending a message” to tech companies with punitive damages.

Their developers don’t plan around litigation. Ours have to.

While companies like Nvidia plead to sell advanced chips to China after the H20 export ban was lifted, Beijing isn’t waiting around. It’s racing ahead, deploying AI in defense, logistics, and manufacturing without lawsuits, regulators, or legal second-guessing.

We don’t envy China. But we must acknowledge that its AI teams aren’t operating with a target on their back.

We’ve Fixed Problems Like This Before

We’ve been here before. In 1996, Congress passed Section 230 of the Communications Decency Act, shielding internet platforms from liability for user-generated content. That one provision allowed Amazon, YouTube, and countless others to thrive.

We need an AI-specific shield now, a legal safe harbor that ensures developers aren’t liable for what users do with their tools, unless there’s fraud or criminal intent.

Without it, legal departments will keep killing products before they launch.

Congress must also revisit a national moratorium on conflicting state AI laws. National consistency doesn’t mean more bureaucracy. It means sane, scalable innovation.

The American Way Forward

This is our Apollo 13 moment.

We have the best technology. We have the best talent. We have an entrepreneurial fire. But we’re losing altitude because the systems designed to protect us are choking progress.

Let’s not become the bureaucracy we escaped to get to the moon.

Let’s be the country that answered Apollo 13’s “Houston, we have a problem” and brought our tax-conscious astronauts safely back home.

Let’s fix this the American way with clear rules, real urgency, and freedom that actually works.

We publish a variety of perspectives. Nothing written here is to be construed as representing the views of The Daily Signal.

The post Why American AI Could Die in Court Before It Ever Takes Off appeared first on The Daily Signal.