CNBC's "Squawk Box" discusses what AI regulation may look like in 2026 with Bradley Tusk, founder and CEO of Tusk Ventures.

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

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Bradley Tusk, CEO of Tusk Ventures, outlined three main areas of AI regulation: generative AI, application-specific bans, and, most critically, permitting and zoning for data centers. He emphasized that the rising energy demands of generative AI could lead to higher electricity costs for consumers, prompting potential public backlash and new legislative measures.

Tusk predicted that by 2026, local governments may restrict new data center permits unless consumer energy costs remain stable. He argued that such regulations could drive innovation in energy-efficient computing, and questioned the sincerity of national security concerns given recent US technology exports to China.

What AI regulation may look like in 2026

For a look at AI potential regulation in the new year, we are joined by Bradley Tusk, founder and CEO of Tusk Ventures. Bradley, great to see you this morning. You've got a pretty thorough view of exactly where you think things are headed on the regulation side and the development side for AI. Obviously, we got this executive order this month from the president suggesting that the federal authorities should supersede states' new laws on AI. Of course, states can do what they want. They can pass the laws. Maybe the government will sue them. Maybe they won't. But how do you think this is coming together in terms of what elements of AI are being regulated, what states are leading? Yeah, I mean, I think there's really three different categories. There's generative AI itself. So we just saw Governor Hochul amend and then sign the RAISE Act in New York. Governor Newsom did something similar a couple of months ago in California. There is the application of AI. So Joe mentioned quickly mental health chatbots. We saw Illinois and Nevada both ban those last year. Seven or eight more states are taking that up right now. And then finally, and this is the one that I actually think is the biggest issue of all, which is the permitting and zoning for data centers. And that's not even at the state level. That's at the municipal and county level. And the reason I think that will actually be the biggest issue this coming year is simply in order to power generative AI with the way that we do compute in this country, typically right now, you need vast amounts of energy. And if energy consumption doubles, which is what the prediction is, and if energy supply stays relatively flat, obviously prices go way, way up. And those costs are being borne by local consumers in their electricity bills. And once those consumers start putting two and two together and realizing that they're paying a lot more money so that NVIDIA or OpenAI or Oracle or whoever benefits as a result, they're going to revolt and they're gonna throw everyone out of office. And politicians, I think, are smart enough to probably realize that. And I think we will start to see legislation all across the country that says that cities and counties cannot issue permitting to new data centers unless there is no corresponding energy cost increase for consumers. And that's really gonna be the big fight of 2026. Obviously the industry puts out these warnings that it's going to stifle innovation or slow down the process of the US becoming or maintaining the lead in AI. Do you actually think that the data center permitting or maybe the backlash against them is something that could compromise the build out here? No, for two reasons. First of all, if you were to say, hey, we're not gonna make consumers bear the cost of all of this. And keep in mind, if there is significant short-term job displacement because of AI, if you're combining people losing their jobs with paying 50% more on their electricity bills, they're gonna, that's a revolution, right? Like that is a really bad thing to let happen. But beyond that, we know there are alternate forms of compute, whether it's an inference model or people are using biological compute or different types of memory cylinders. So we know that that exists. And in a way, if you were to say, we're not going to just impose all of these costs and negative externalities on consumers, it actually forces innovation. It forces the companies to say, how can we do the same sort of compute without the same sort of energy needs? So it's probably to the good. The second is you mentioned sort of the AI race in terms of things like national security. That's really not a good thing to do because the president allowed NVIDIA to sell the H200 chips to China last week or two weeks ago. And if this were a national security issue, you clearly wouldn't give your biggest enemy the most sensitive technology you have.

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What AI regulation may look like in 2026

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