Senate drops plan to ban state AI laws

The Verge

4 days ago

The US Senate has voted overwhelmingly to remove a moratorium on states regulating AI systems from the Republican 'big, beautiful bill.' Legislators agreed by a margin of 99 to 1 to drop the controversial proposal during a protracted fight over the omnibus budget bill, which is still under debate.
The vote followed failed attempts to revise the rule in a way that would placate holdouts, particularly Sen. Marsha Blackburn (R-TN), one of the moratorium's first opponents. Over the weekend, Blackburn struck a deal with Sen. Ted Cruz (R-TX) that would have cut the moratorium to five years and allowed states to continue enforcing AI laws that handled online child safety as well as individuals' names, images, and likenesses. But after a day of furious backlash from the populist right, driven primarily by MAGA internet powerhouses Steve Bannon and Mike Davis, Blackburn relented at the last minute — and chose, instead, to attach her name to a Democrat-sponsored amendment that sought to remove the bill altogether.
'While I appreciate Chairman Cruz's efforts to find acceptable language that allows states to protect their citizens from the abuses of AI, the current language is not acceptable to those who need those provisions the most,' she said in a statement on Monday night. 'This provision could allow Big Tech to continue to exploit kids, creators, and conservatives.'
Early fellow GOP defectors included Sen. Susan Collins (R-ME); Sen. Josh Hawley (R-MO), an anti-tech hawk; and Sen. Rand Paul (R-KY), who raised concerns about federal overreach. But ultimately, nearly everyone agreed on removing the AI provisions — the lone vote against it was from Sen. Thom Tillis (R-NC). The Senate must still vote on the budget reconciliation vote, after which it will return to the House before being passed to President Donald Trump's desk.
The House of Representatives quietly lodged the first draft of the moratorium in its version of Trump's funding megabill, passing it almost entirely along party lines by a vote of 215-214 in May. The stated goal was to avoid a patchwork of state AI regulations that could inhibit industry growth. But the plan was contentious even before the Senate began formal debate on its version, which required states to avoid regulating AI and 'automated decision systems' if they wished to receive funding for broadband programs. It became a flash point in an already heated fight over the bill, resulting in furious backroom negotiations, an apparent deal, and then a daylong concerted effort to tank the bill.
Senate Republicans had already fractured over several amendments inside the bill, but the addition of the AI moratorium turned the whip count into a trainwreck of competing interests — particularly within the Republican faction normally opposed to Big Tech and federal overreach. In a letter sent to Senate Majority Leader John Thune (R-SD) last week, several GOP senators, including Hawley and Paul, joined Blackburn in voicing their opposition to the bill for varying reasons, including their concern that it would automatically curtail preexisting state AI laws. (Tennessee, for instance, passed a law in 2024 that protected individuals' likenesses from being used by generative AI.)
On the other hand, Cruz, the chairman of the Senate Commerce, Science, and Transportation Committee and widely considered as a hard-right figure, authored an amendment that would have specifically barred states with AI laws from accessing federal funds earmarked for AI development.
The moratorium has proven especially unpopular with state-level GOP figures: last week, 37 state attorneys general and 17 governors bombarded Thune with letters urging him to drop the clause. Gov. Sarah Huckabee Sanders of Arkansas, Trump's former White House press secretary, went so far as to author a Washington Post op-ed denouncing the bill as removing states' abilities to protect their own citizens. Other critics contended that the bill's definition of 'AI' is broad enough to ban entire swathes of software- and internet-related regulations, including Republican-backed state-level online child safety laws.