HR 10538
To establish the Department of Artificial Intelligence and to provide for the regulation of advanced artificial intelligence systems, and for other purposes.
TL;DR
Rep. Greg Casar (D-TX) wants to create a brand new federal Department of Artificial Intelligence to regulate advanced AI systems, similar to how the FDA regulates drugs. The bill would establish licensing, testing, and oversight requirements for companies building frontier AI models, though specific rules would be developed by the new department.
How This Might Impact Your Business
Any company developing or deploying advanced AI systems (think GPT-class models, autonomous decision systems) would face a new federal regulator with authority to license, audit, and potentially restrict their products.
AI-heavy industries including Big Tech, HR Tech, Healthcare AI, FinTech, and autonomous vehicles would be first in line for compliance obligations once the department writes its rules.
Companies using third-party AI tools (not just builders) could face downstream compliance costs, since vendors would likely pass through licensing and testing expenses.
No immediate deadlines exist because the bill only creates the agency; actual rules, penalties, and thresholds would be set through future rulemaking that typically takes 2-4 years.
Small businesses using off-the-shelf AI tools (Microsoft Copilot, ChatGPT) are unlikely to be directly regulated, but pricing and features of those tools could change.
Bill is currently in the House Oversight Committee with a single Democratic sponsor in a Republican-controlled House, giving it low odds of passage this session.
Even if this bill stalls, it signals growing Democratic appetite for a centralized AI regulator, similar to proposals from Senators Warren and Bennet.
What Should You Do
Ask your legal or compliance team to inventory which AI systems your company builds versus uses, since builders would face far heavier obligations under any future AI agency.
Assign someone to track this bill and companion Senate proposals; the concept of a federal AI regulator is gaining traction even if this specific bill dies in committee.
If you sell AI products to enterprise customers, start documenting your model testing, training data sources, and safety evaluations now, as this documentation will be table stakes for any federal licensing regime.
Review vendor contracts with major AI providers (OpenAI, Anthropic, Google, Microsoft) for clauses that pass regulatory compliance costs to customers.
Skip lobbying spend on this specific bill given its long odds, but consider joining industry groups (BSA, Chamber of Commerce AI Commission) shaping the broader federal AI regulator debate.
Who It Affects
Sponsors
Status Timeline
committee
Referred to the House Committee on Oversight and Government Reform.
September 24, 2026