Senate Drops Trump‑Backed State AI Ban After Bipartisan Pushback
After uproar from states, tech critics and legislators, the Senate voted overwhelmingly to remove a clause in Trump’s megabill that would have barred state AI regulation. The debate reflects growing tension over federal vs state authority in AI oversight.
The U.S. Senate voted overwhelmingly to strip a clause from a sweeping Republican tax and spending package that would have barred states from regulating artificial intelligence for a decade. The move marks a rare bipartisan rebuke of a Trump‑led federal preemption effort amid growing concern over AI oversight and regulatory fragmentation.
What We Know
The Senate voted 99–1 on July 1, 2025, to remove a 10‑year moratorium on state AI regulation from the bill, rejecting a federal ban that had tied state access to a $500 million AI infrastructure fund to compliance with the prohibition. Republican Senator Marsha Blackburn led the amendment to strike the provision, despite earlier negotiating a shorter, five‑year compromise with Senator Ted Cruz. Both state officials and safety advocates from across the political spectrum had warned that the moratorium would undermine public protections in the absence of comprehensive federal AI legislation.
What It Means
The vote underscores growing political resistance to blanket federal control over emerging tech regulation. States—including California through a bipartisan delegation—argued the moratorium threatened critical protections against AI‑driven harms such as deep‑fake fraud, AI‑generated child exploitation, and systemic bias. Tech firms like OpenAI and Google had backed the preemption to avoid a fragmented patchwork of regulations. Senate action preserves states’ power to act and signals momentum toward a dual approach: crafting a federal framework while preserving local authority to address immediate and localized risks.
The Backstory
The moratorium first appeared in the House version of the “big, beautiful” Republican megabill and sparked pushback from governors and state legislators. California lawmakers warned the provision could nullify longstanding state consumer and safety laws. Industry titans and AI leaders warned that too many competing state rules would hamper the U.S.’s global competitiveness—but lawmakers demanding more oversight across jurisdictions challenged that view.
What’s Next
With state moratorium off the table, Congress faces renewed pressure to pass targeted federal AI regulation. Lawmakers have signaled a desire to develop guardrails addressing AI safety, fairness, and transparency. Debate is likely to focus on aligning federal AI standards while enabling states to act on urgent threats where federal law lags.
