Tech-friendly Republicans Propose Decade-long Block on State Artificial Intelligence Regulations
The U.S. is currently considering a decade-long ban on state-level AI regulations, a proposal that reflects a deregulatory, innovation-focused agenda. This ban, if enacted, would have significant implications for the regulation of AI in the country.
The moratorium was initially included in a version of the House budget proposal, known as the Big Beautiful Bill (BBB), which would prohibit states and local governments from enforcing any laws regulating AI models, systems, or automated decision systems for a period of 10 years from the bill’s passage. However, this provision was later removed from the final version that passed the House.
In the Senate, there has been an effort led by Senators Ted Cruz and Marsha Blackburn to impose a shorter, five-year moratorium on such state regulations, linking acceptance of this moratorium to access to $500 million in AI infrastructure funding.
If enacted, the moratorium would remove state and local regulatory barriers to AI development and deployment, effectively centralizing AI oversight at the federal level or leaving AI largely unregulated by subnational entities for up to a decade. This aligns with the Trump administration’s broader policy thrust to accelerate AI innovation through deregulation, infrastructure investment, and strategic federal coordination.
The potential impact of such a ban would be significant. It could facilitate rapid AI adoption in sectors like healthcare, defense, manufacturing, and science by reducing fragmented, potentially restrictive state laws. However, critics might argue this could allow unchecked AI deployment and insufficient consumer protections until any federal regulations are developed or enforced.
The proposal comes after a Commerce Committee hearing titled "Winning the AI Race". During the hearing, OpenAI CEO Sam Altman expressed concern that allowing states to assemble a patchwork regulatory framework could slow down progress in AI development. On the other hand, Rep. Jan Schakowsky (D-Illinois) blasted the proposal as a "giant gift to Big Tech".
The very inclusion of the moratorium in House Republicans' budget bill suggests that the U.S. will continue hurling down the AI-or-be-damned pathway with no regard for the consequences. This comes at a time when the U.S. is known for falling behind in tech-related legislation, as seen in the lack of a comprehensive federal privacy law.
The current status of the proposed moratorium is that it remains contested, with a possible shorter moratorium and financial incentives being discussed in the Senate. Its impact would be to broadly preempt state laws that might restrict AI development, promoting a centralized, less regulated environment for AI innovation within the U.S.
References:
- The Information
- The Verge
- TechCrunch
- Wired
- According to The Information, the moratorium on state-level AI regulations in the House budget proposal, also known as the Big Beautiful Bill (BBB), aims to prevent states and local governments from enforcing any AI-related laws for a decade, aligning with a deregulatory, innovation-focused agenda.
- In addition to the House bill, Senators Ted Cruz and Marsha Blackburn have proposed a shorter, five-year moratorium on state AI regulations, linking acceptance of this moratorium to access to $500 million in AI infrastructure funding, as reported by TechCrunch.
- The debate about this policy-and-legislation issue has attracted attention from tech-focused news outlets such as Wired, with some arguing that the moratorium would remove state and local regulatory barriers to AI development and deployment, thereby centralizing AI oversight at the federal level or leaving AI largely unregulated by subnational entities.
- Meanwhile, general-news sources like The Verge and The Verge highlight concerns that the widespread adoption of AI could occur without proper consumer protections, as a result of this moratorium, potentially leading to unchecked AI deployment and insufficient oversight.