A Republican-led effort to curb state-level AI regulations cleared a major hurdle this weekend, as a controversial proposal to block states from enforcing their own AI laws moved closer to becoming reality. The provision, spearheaded by Senate Commerce Chair Ted Cruz, aims to penalize states that attempt to regulate AI by withholding federal broadband funding for the next 10 years.
Cruz reportedly revised the rule to meet the Senate’s budget reconciliation requirements, and the Senate Parliamentarian has now ruled that the moratorium does not violate the Byrd rule. That means it can be passed with a simple majority as part of the GOP’s sweeping legislative package—nicknamed the “One Big, Beautiful Bill”—without needing support from Democrats or facing a Senate filibuster.
Still, internal GOP divisions are emerging. Senator Marsha Blackburn of Tennessee has voiced opposition, warning that the provision would restrict states from protecting their own citizens. And Representative Marjorie Taylor Greene, a far-right House Republican, has slammed the moratorium as a “violation of state rights” and demanded it be removed.
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Despite the backlash, Republican leadership remains firm. House Speaker Mike Johnson defended the moratorium, pointing to support from former President Donald Trump and arguing that a fragmented patchwork of state AI rules could harm national security. “We have to be careful not to have 50 different states regulating AI,” he said.
The proposal follows the House’s earlier approval of a similar provision, but its future in the Senate remains uncertain amid mounting pushback from within the GOP. Critics warn that tying broadband funding to state regulatory behavior sets a dangerous precedent and undermines federalism.
Outside groups are also raising alarms. Advocacy organization Americans for Responsible Innovation warned in a recent report that the proposal’s vague language could wipe out a wide range of state-level tech regulations, creating a “regulatory vacuum” without providing any federal framework to replace them.
While Washington debates, several states are already moving forward with their own AI laws. In California, Governor Gavin Newsom last year vetoed a major AI safety bill, though he signed smaller regulations on deepfakes and privacy. New York is waiting on Governor Kathy Hochul to sign a recently passed AI safety bill, and Utah has enacted its own rules around AI transparency.
With no comprehensive federal AI framework in place, state initiatives have filled the gap, sparking a broader debate over who should shape the rules for emerging technologies. Whether the federal AI regulation moratorium survives the legislative gauntlet could redefine how AI policy is made in America—for years to come.
