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A controversial 10-year ban on state AI regulation has been removed from the Trump administration’s “Big Beautiful Bill” after all but one member of the US Senate voted against the ban.
The AI “moratorium”, as it has been called by Senator Ted Cruz, who introduced it, would prevent the states’ ability to regulate AI for the next 10 years.
The legislation saw massive support from tech and AI giants, including Anduril’s Palmer Luckey, a16z’s Marc Andreessen, and OpenAI’s Sam Altman, all of whom said it would prevent a roadblock on innovation in the form of a complicated web of regulation.
However, from the get-go, both Democrats and many Republicans opposed the ban, saying it would unleash the dangers of tech giants and unregulated AI on consumers.
Commerce committee Democrat head Senator Maria Cantwell said the AI regulation ban would violate consumer protection laws.
“We can’t just run over good state consumer protection laws. States can fight robocalls, deepfakes and provide safe autonomous vehicle laws,” Cantwell said.
Republican and Arkansas Governor Sarah Huckabee Sanders also agreed that AI regulation is necessary to curb consumer danger, particularly when it comes to children.
“We will now be able to protect our kids from the harms of completely unregulated AI,” she said.
Over the weekend, the moratorium was once again raised by Republican Senator Marsha Blackburn, discussed it with Cruz and reduced the ban length from 10 years to five. However, on Monday (30 June), Blackburn, who has always opposed the ban, removed her support from it altogether.
“Until Congress passes federally pre-emptive legislation like the Kids Online Safety Act and an online privacy framework, we can’t block states from making laws that protect their citizens,” she said.
The Senate then voted on the AI ban provision, with 99 for removing it, and only one for keeping it.
Pushing governments to limit regulation with the promise of greater innovation is nothing new for the AI giants. Last month, the UK House of Lords ruled in favour of allowing AI companies to train their technology on copyrighted material without the permission of the creator.
After failing to pass the House of Lords four times, the Data (Use and Access) Bill moved through both houses after the government proposed some amendments that improve transparency as to what data is being used.
Most of the bill will be laid out in future legislation and thus will not take effect until at least 2026, as the government is adamant that regulating AI practices should not be dealt with in the bill, but instead with an AI bill, which may not appear until next year.
“The deadlock has now cleared – but it leaves a regulatory gap. The government has made clear it will not be drawn into regulating AI training practices via fragmented amendments. Instead, it remains committed to introducing a ‘comprehensive’ AI bill in the next parliamentary session – though that could be as late as 2026,” said the managing associate in the commercial disputes team at Addleshaw Goddard, Rebecca Newman.
“This outcome leaves the question of whether AI developers must ensure their models are trained in accordance with UK copyright law unresolved – but given the ongoing Getty trial, the answer will likely be shaped first by the courts, not Parliament.”
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