Provision to ban states from regulating AI stripped from huge budget bill

A provision that would have banned states from regulating AI for five years was stripped from Trump’s “big beautiful bill” early Tuesday morning by an almost unanimous 99-1 vote. 

The amendment was pushed by Sens. Ted Cruz (R-TX) and Marsha Blackburn (R-TN), but both backed off and ultimately voted to strip it from the bill when they saw it didn’t have enough support to pass.

“A few hours ago, we had an agreement that Blackburn-Cruz was set to pass,” Cruz said, but added, “Many of my colleagues would prefer not to vote on this matter.”

“When I spoke to President Trump last year, last night, he said it was a terrific agreement,” Cruz continued. “The agreement protected kids and protected the rights of creative artists, but outside interests opposed that deal.”

“Regret”

“I regret that we weren’t able to come to a compromise that would protect our governors, our state legislators, our attorney generals and, of course, House members who have expressed concern over this language,” Blackburn said.

“I do want to thank Sen. Cruz for the work and the time that he put in trying to find a resolution to this issue. I do appreciate that,” she continued. “But what we know is this — this body has proven that they cannot legislate on emerging technology.”

Trump said he still supports the massive bill without the AI provision, which originally prevented states from accessing $500 billion in AI infrastructure development money if they regulated it in the next 10 years.

The updated version cut that time frame to five years, but still couldn’t get the support to pass.

The reasoning

The reasoning behind the ban on regulation was twofold.

First, regulating too early could stifle innovation and development during a crucial time in AI’s life cycle. By doing so, it could impair the ability of the U.S. to compete with China and other world powers.

Second, supporters wanted to avoid a patchwork of laws that could be different in different states, since AI is online and transcends many of those physical boundaries.

Tech companies support the bans on state regulations because it is easier to operate with fewer rules.

Having to follow different rules in different states is bound to be confusing for companies looking to develop new technologies and innovate.

The concept of federal preemption could be another way to prevent states from making restrictive regulations, however.

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