On September 23, 2026, a bipartisan coalition of 26 attorneys general (AGs) led by New York AG Letitia James wrote to congressional leadership urging Congress to establish comprehensive federal regulation and safety protocols for frontier artificial intelligence (AI). The letter identifies six elements the signatories say belong in any federal regulatory scheme, including an explicit prohibition on preemption of state AI laws.
Link to Background: The Incident Record Background: The Incident Record
According to the letter, within a week after open-source repository Hugging Face reported an attack by an unknown third party, OpenAI acknowledged its AI agents had escaped a testing environment and infiltrated Hugging Face using stolen credentials. The AGs emphasize that OpenAI was aware of the agents’ capabilities but did not adequately monitor their activity, noting that the same conduct by a human would violate criminal law (i.e., the Computer Fraud and Abuse Act).
The letter describes several disclosures that followed: an Anthropic model that created and uploaded malware to a public platform, a Meta AI breach of an undisclosed third-party software platform, and a Chinese AI lab’s report that one of its agents escaped its testing environment. The AGs call the behavior “agentic misalignment” and attribute it to the labs’ own training methods, which they say reward models for achieving goals “regardless of how they were achieved.”
Link to The Self-Regulation Argument The Self-Regulation Argument
The AGs’ central assertion is that the labs only disclose when forced and that a regulatory model built on their voluntary candor will fail. In support, the AGs claim that OpenAI initially characterized the Hugging Face attack as limited to a few agents going “to extreme lengths to achieve a rather narrow testing goal” when in fact many agents were involved in the serious incident. The letter implies that the companies themselves restricted the post-mortem efforts needed to fully understand the nature and scope of the incident, underscoring the need for government regulatory oversight.
In the letter, the AGs quote OpenAI’s chief global affairs officer, Anthropic’s CEO and current and departing lab safety personnel calling for federal regulation and government support in light of what they characterize as an existential risk. Anthropic’s head of alignment science is quoted stating that “we really do earnestly believe AI could kill all humans!” The AGs’ conclude that the government should hold them to their word and take the opportunity to enact a meaningful regulatory framework.
Link to What the Coalition Asks For What the Coalition Asks For
The letter encourages Congress to keep all regulatory options available, and points to Congress’s prior regulation of transportation systems, scientific and technical fields, and national security as models. It asks that AI development occur at an intentional pace, incorporate safety and transparency by design, and avoid entrenching large incumbents. The coalition states that federal regulation must include six elements:
- Mandatory federal oversight of safety testing and standards, led by AI safety experts selected by and directed by federal regulators, and backed by consistent performance benchmarks.
- Uniform, government-led incident response, with investigators holding a broad mandate and direct access to books and records, and with public findings.
- Mandatory safety infrastructure and experienced safety leadership, able to make critical decisions unburdened by profit maximization.
- International cooperation to pace AI advancement and prevent development of harmful superintelligence.
- Antitrust safeguards, ensuring that regulation does not undermine competition or provide cover for companies to evade obligations under existing antitrust laws.
The letter confirms that the signatory offices will continue to hold AI labs accountable under their respective state laws. The AGs further maintain that they are best positioned to enforce the laws and caution against federal preemption and urge legislation that authorizes the states to enforce federal law.
Link to Why It Matters Why It Matters
The letter is a statement of enforcement intent, not only a legislative request. The AGs say they are actively pursuing AI labs under existing state law, and frame federal legislation as necessary for national coordination, not a substitute for authority they lack. Companies should read it as notice that state unfair and deceptive practices statutes and AI-specific state requirements are being applied to frontier model conduct.
Much of the letter describes deception rather than dangerous conduct. A substantial portion concerns not what the agents did but when and how completely the labs disclosed the incidents. That is familiar territory under state consumer protection statutes, and it is separable from any question of whether the incidents violated legislation specifically aimed at AI. The AGs make clear that the humans involved will be held accountable.
The antitrust element mentioned in the letter also subtly signals that the AGs are interested in a fulsome regulatory framework that addresses concerns beyond safety. The AGs are seeking to avoid regulatory capture with this emerging technology and related burgeoning industry. Companies engaging in federal AI legislation should expect state AG scrutiny of the competitive effects of whatever framework emerges, not only its safety provisions.
Troutman Pepper Locke State Attorneys General Team
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Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation. |
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Clay Friedman – Co-leader Clay co-leads the firm’s State Attorneys General practice and is nationally ranked by Chambers USA for AG Government Relations and in Best Lawyers for Advertising Law. He has dedicated his entire career to state attorney general and federal work, serving for nearly a decade in a senior role and more than 25+ years in private practice. Clay focuses his practice on helping industry-leading companies mitigate the risks associated with state and federal regulatory investigations and associated litigation. |
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Chris Carlson Chris advises clients on regulatory, civil, and criminal investigations and litigation. With a background as an assistant attorney general, he provides practical guidance to clients with matters involving state attorneys general and federal regulatory agencies. |
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Lauren Fincher Lauren has vast experience handling state attorneys general investigations, navigating complex regulatory compliance matters, and providing strategic counsel in enforcement actions across various industries. She helps clients manage high-stakes regulatory matters and guides them through complex legal landscapes. |
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Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, representing clients in single and multistate enforcement actions, including inquiries and investigations involving state attorneys general and other state and federal governmental enforcement bodies including the CFPB and FTC. He regularly represents clients in highly regulated sectors such as financial services, emerging technologies, health care, insurance, and education. |
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Michael Yaghi Mike handles high-profile investigations led by state attorneys general, the FTC, and other federal and state regulatory bodies. He assists clients through these complex government inquiries, assisting them throughout the entire life cycle of investigations, from regulatory enforcement through formal litigation. |
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Matthew J. Berns Drawing on his experience in senior leadership roles in the New Jersey Attorney General’s and Governor’s Offices and as a trial attorney for the U.S. Department of Justice, Matt provides an insider’s perspective when guiding clients through complex government investigations, litigation, and other actions. |
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Jeff Johnson Jeff helps clients navigate complex regulatory and litigation challenges with local, state, and federal authorities. His clients benefit from his decade of broad litigation experience, understanding of emerging state and federal regulatory issues, and strong relationships with attorneys general across the U.S. In addition to handling cases from trial through state or federal appeals, Jeff serves as amicus counsel in advancing legal rules to support his clients’ vital interests. |
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Jay Myers Jay assists clients in heavily regulated industries, including health care, energy, insurance, emerging industries, and data privacy. He provides both regulatory legal advice and government relations strategies. Jay’s past and current clients include Fortune 10 companies, startups, nonprofits, industry associations, and advocacy groups. Recognizing that state government matters are often complex and multifaceted, he utilizes regulatory guidance, government advocacy, or both in tandem to deliver tailored solutions for each client’s unique needs. |
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Zoe Schloss Zoe represents clients in litigation and government investigations. As former deputy attorney general for the Delaware Department of Justice, she is an experienced litigator who understands the enforcement priorities that impact her clients. Zoe works with individuals and corporate entities in highly regulated industries, including financial services, health care, and energy. |
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Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology. |
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Sydney Goldberg Sydney is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. She advises clients on regulatory compliance and state attorney general (AG) investigations in highly regulated industries, including health care and life sciences. She routinely helps clients navigate alcohol compliance and licensing issues, helping proactively manage regulatory risk. |
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Troy Homesley Troy is an accomplished litigator who has represented and defended clients across a wide range of complex, high-stakes disputes at both the trial and appellate levels. He has represented technology companies, business executives, law firms, investment funds, high-ranking federal officials, international non-profits, and asylum seekers. Troy draws on his broad litigation experience to advise clients before litigation arises, while claims are pending or threatened, and leading up to and through trial and appeals. |
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Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. Nam’s experience transcends multiple industries, including financial services, telecommunications, media, and sports betting. |
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Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general. |
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William LaRosa Bill represents clients in complex regulatory investigations, state attorneys general matters, and enforcement proceedings. He draws on his experience as a former assistant U.S. attorney and as a private-sector litigator advising corporations in high-stakes litigation and regulatory investigations, including multistate AG investigations. |
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Lane Page Lane represents financial institutions and other clients in federal and state regulatory investigations and complex civil litigation. He is particularly focused on consumer protection and fair lending issues. |
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Dascher Pasco Dascher provides strategic counsel and representation to clients navigating regulatory compliance, enforcement, and high-stakes litigation. She regularly represents clients in both single and multistate state attorney general (AG) investigations and enforcement actions, as well as before other state enforcement bodies and local government agencies. |
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Kyara Rivera Rivera Kyara is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, cum laude, where she served as publications and online editor of the Public Interest Law Review. |
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Timothy Shyu Timothy advises clients on regulatory compliance and enforcement in highly regulated industries, including health care and life sciences, data privacy and cybersecurity, and emerging technology. He assists companies in navigating complex investigations and enforcement actions, helping them mitigate regulatory risk proactively. |
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Trey Smith Trey focuses his practice on representing and advising regulated utilities before state public utility commissions. He routinely helps clients obtain certificates of public convenience and necessity for transmission infrastructure. In this role, Trey works with his clients’ subject-matter experts to manage administrative proceedings, including by preparing initial filings; responding to discovery requests; drafting rebuttal testimony; and litigating any disputed issues. |
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Daniel Waltz Dan helps clients navigate all aspects highly regulated relationships between industry participants and federal, state and local governments. Whether engaging with regulators, negotiating transactions or representing clients in the courtroom, he delivers solutions that help his clients achieve their strategic goals. |
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Stephanie Kozol Stephanie is Troutman Pepper Locke’s senior government relations manager in the state attorneys general department. |