House Republicans pushed forward this week with a bid to ban state regulation of artificial intelligence (AI), sparking debate among the tech community and lawmakers over its implications for the emerging tech.
The proposal passed the House on Thursday morning as part of a sweeping tax and spending bill. Now, it faces an uphill battle in the Senate in the wake of procedural rules and potential resistance from some GOP senators.
What to know
The proposal, tucked into President Trump’s “one big, beautiful bill,” calls for a 10-year moratorium on state laws regulating AI models, systems or automated decision systems. This includes enforcement of existing and future laws on the state level.
Proponents of the moratorium argue a patchwork of state laws can be confusing or burdensome for technology companies to follow when operating in multiple parts of the country.
“Right now, there are over a thousand bills on the topic of AI regulation pending in state legislatures across the country,” Rep. Jay Obernolte (R-Calif.) said during the House Energy and Commerce Committee's markup of the measure.
“Imagine how difficult it would be for a federal agency that operates in all 50 states to have to navigate this labyrinth of regulation when we potentially have 50 different states going 50 different directions on the topic of AI regulation,” Obernolte adding, referring to the ongoing push to incorporate AI into federal agencies.
“This is exactly the same circumstances that we are putting private industry in as they attempt to deploy AI," he added.
The bill includes some exemptions for states’ enforcement of laws focused on promoting AI development.
This includes regulations that seek to remove barriers or facilitate the use of AI models and systems or those focused on streamlining processes like licensing or permitting to help AI adoption.
The push aligns with the Trump administration’s broader pro-innovation agenda that prioritizes technology development over regulations that hamper U.S. innovation and competitiveness.
Vice President Vance in February slammed what he called "excessive" regulations of AI, while Trump rolled back former President Biden’s AI executive orders he believes hampered innovation.
No federal framework yet
Most supporters of a moratorium make clear they are not against regulation as a whole but believe it should be done at the federal level for a unified standard for companies to easily follow.
And while lawmakers have discussed a federal AI framework for years, no effort has made significant progress.
The House Task Force on AI released a sweeping report at the end of last year that proposed a federal regulatory framework. Obernolte, the co-leader of the task force, expressed frustrations during the markup that Congress has not moved on this.
“Congress needs to get its act together and codify some of the things in this report,” he said, adding, “A moratorium is appropriate and then that will allow us a little bit of runway to get our job done and regulate.”
Meanwhile, many Democrats are against the moratorium over concerns it is overreaching and risks harm to consumers in the absence of a federal standard.
Democratic Rep. Doris Matsui (Calif.) called the moratorium a “slap in the face to American consumers.”
Matsui’s home state of California is one of the country’s leaders when it comes to AI legislation and regulation given its Silicon Valley community.
“The U.S. should be leading in the global race for AI dominance,” she said. “If we don’t lead, others will. However, we can’t shoot ourselves in the foot by stopping the good work that states have done and will continue to do.”
Some Democrats say they would be more willing to support a moratorium if a federal framework existed already.
Rep. Scott Peters, another California Democrat, said it was a “close call” but decided to support an amendment to eliminate the provision given the lack of federal standard.
"We don't have a standard that we're offering, and I think the moratorium is too long. We should be able to do it in a much shorter period of time,” Peters told Obernolte during the markup.
Should the provision be stripped from the Senate reconciliation bill, some Republicans are eyeing separate legislation, Rep. Laurel Lee (R-Fla.) told The Hill.
When pressed over whether this would take place this year, Lee said Trump has brought “a lot of focus and attention to artificial intelligence and innovation, so that will likely help build enthusiasm and focus in Congress as well.”
“I’m open-minded,” said Rep. Gus Bilirakis (R-Fla.), a senior member of the House Energy and Commerce Committee, when asked about independent legislation.
Obstacles in Senate
While House Republicans got the provision over the finish line in their chamber, it faces greater challenges in the Senate.
Lawmakers are concerned the provision may not pass the Byrd Rule, a procedural rule in the Senate prohibiting “extraneous matters” from being included in reconciliation packages. This includes provisions that do not “change outlays or revenues.”
It is up to the Senate parliamentarian to determine whether the moratorium violates the Byrd Rule.
The measure was included in a section ordering the Commerce Department to allocate funds to “modernize and secure federal information technology systems through the deployment of commercial artificial intelligence.”
Moreover, at least two GOP senators known for their criticism of major tech companies voiced concerns with the moratorium this week.
“We certainly know that in Tennessee we need those protections,” Sen. Marsha Blackburn (R-Tenn.) said during a hearing last week on No Fakes Act, which would create federal protections for artists’ voice, likeness and image from nonconsensual AI-generated deepfakes.
Blackburn was discussing Tennessee’s Elvis Act, which resembles her No Fakes proposal.
“Until we pass something that is federally preemptive, we can’t call for a moratorium,” she said.
Punchbowl reported Sen. Josh Hawley (R-Mo.) also pushed back against the proposal.
The proposal is also seeing pushback from some state leaders, including a group of 40 state attorneys general who called the bid "irresponsible."
Tech industry, watchdog reactions
Like many Democrats, several tech watchdog groups are concerned a federal framework could take too long and cause “unfettered abuse” in the meantime.
In a letter sent to House leadership earlier this week, a coalition of more than 140 organizations urged lawmakers to remove the provision.
Signatories, which included groups like Amazon Employees for Climate Justice and nonprofit Public Citizen, argued state actions on AI so far have attempted to protect residents from the risks that are otherwise ignored by Congress.
Rep. Jan Schakowsky (D-Ill.), the ranking member on the House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade called the proposal a “giant gift to Big Tech.”
Small and midsize firms reject this characterization, arguing larger technology companies have the financial and legal resources to comply with state regulations, while smaller ventures do not.
“These entrepreneurs will be the ones who build the next transformative AI breakthroughs if the policy environment empowers them to do so,” said John Mitchell, the director for Consumer Technology Association, a trade association representing mostly small and midsize tech firms.
Mitchell said he does not believe Congress will move too slowly for their own framework as the watchdog warn.
“I think that Congress is keenly aware that we could fall into the data privacy realm, where there are so many patchworks and has been detrimental to our business community,” he said.
Like for AI, there is no comprehensive national privacy law, despite a years-long push from some lawmakers.
Bigger technology companies like OpenAI also support of a light-touch federal framework that preempts what CEO Sam Altman called “burdensome” state laws during a Senate hearing earlier this month.
Microsoft President Brad Smith, during the same Senate hearing, advocated for a similar approach to the limited regulation that allowed the early internet commerce to develop.
“There’s a lot of details that need to be hammered out, but giving the federal government the ability to lead, especially in the areas around product safety and pre-release reviews and the like, would help this industry grow,” Smith said.
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