US Senate crushes attempt to ban state AI regulations

In a stunning 99–1 rebuke, the US Senate on Tuesday torched President Donald J. Trump’s push for a 10-year ban on state AI regulations, yanking the controversial provision from his so-called “Big Beautiful Bill.”

The lopsided vote delivered a sharp slap to Silicon Valley’s dream of dodging local oversight over the fast-evolving technology.

The proposed measure stated that “no State or political subdivision thereof may enforce any law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems.”

Sen. Ted Cruz, (R-TX), and tech companies like Google, OpenAI, Microsoft, Meta, and Amazon had supported a moratorium on state rules to prevent what they consider a fragmented regulatory landscape — arguing it would slow AI adoption and complicate nationwide deployment. Congressional backers had argued that a regulatory ban would give the US a competitive edge over China because there were be fewer hurdles. They have also compared the restriction on state regulations to the Internet Tax Freedom Act, which helped the early internet grow.

But there are key differences, according to Travis Hall, director for state engagement for the nonprofit Center for Democracy & Technology (CDT), which last month joined others in signing a letter in opposition to the move. The groups warned that removing AI protections would leave Americans vulnerable to current and emerging AI risks.

The 1990s internet needed unity to thrive, Hall said in reference to the Internet Tax Freedom Act, while AI is a diverse set of tailored technologies — meaning varied regulations won’t splinter it. Hall’s comments came in an earlier interview with Computerworld.

On Tuesday, Alexandra Reeve Givens, the CDT’s president and CEO, said the overwhelming vote to strike the AI moratorium from the budget bill reflects just how unpopular it is among voters and state leaders of both parties. “Americans deserve sensible guardrails as AI develops, and if Congress isn’t prepared to step up to the plate, it shouldn’t prevent states from addressing the challenge,” she said. “We hope that after such a resounding rebuke, Congressional leaders understand that it’s time for them to start treating AI harms with the seriousness they deserve.”

Sen. Marsha Blackburn, (R-TN), and Sen. Maria Cantwell, (D-WA), had criticized Congress for inaction on AI deepfakes, discrimination and online privacy issues, saying states have been forced to fill the gap. That prompted praise for Blackburn from an unlikely ally: Sen. Bernie Sanders (I-VT), who praised her for “leading the charge” to protect states’ rights to regulate AI.

In a failed attempt to rescue the ban, GOP lawmakers tied federal funding for rural broadband projects to AI regulation, allowing subsidies only for states that eased their rules and cut the regulatory moratorium from 10 years to five. That did little to mollify critics, however.

The proposed moratorium was a double-edged sword, according to Abhivyakti Sengar, a research director with the Everest Group. “On one hand, it aims to prevent a fragmented regulatory environment that could stifle innovation; on the other hand, it risks creating a regulatory vacuum, leaving critical decisions about AI governance in the hands of private entities without sufficient oversight,” she had said in an earlier interview.

State and local lawmakers, along with AI safety advocates, had sharply criticized the effort, calling it a favor to an industry seeking to avoid accountability. Led by former Trump press secretary and now Arkansas Gov. Sarah Huckabee Sanders, most GOP governors sent a letter to Congress opposing it.

Red and blue states alike — including Arkansas, Kentucky, and Montana — have passed bills governing the public sector’s AI procurement and use. Several states, including Colorado, Illinois, and Utah, have consumer protection and civil rights laws governing AI or automated decision systems. This year alone, about two-thirds of US states have proposed or enacted more than 500 laws governing AI technology.

Trump’s budget bill, which mainly consists of spending cuts and tax breaks, was narrowly passed by the Senate in a 51-50 vote with Vice President J.D. Vance breaking the tie. Three Republicans opposed the bill — Sens. Thom Tillis of North Carolina, Susan Collins of Maine, and Rand Paul of Kentucky. The measure now goes back to the US House of Representatives.