Major tech companies could receive an unexpected victory in President Donald Trump’s signature “Big Beautiful Bill” but they shouldn’t start celebrating just yet.
House Republicans squeezed a provision into part of the sweeping tax, immigration, and defense legislation, which would prohibit states from regulating artificial intelligence for a decade.
“Except as provided in paragraph (2), no State or political subdivision thereof may enforce any law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems during the 10-year period beginning on the date of the enactment this Act,” the bill reads.
The text, first noticed by 404 Media, would be a godsend to major tech companies that have pushed the White House to oppose state-level AI regulations. Meta previously told the White House that such regulations “could impede innovation and investment.”
OpenAI, Meta, and Alphabet have all opposed state-led efforts to regulate the rapidly growing industry. Last year, California Gov. Gavin Newsom vetoed what would have been one of the nation’s furthest-reaching AI laws after it overwhelmingly passed the state legislature. OpenAI was among the leading tech companies to oppose that bill.
Congress has considered federal AI policies but those efforts have yet to go anywhere.
Big Tech CEOs have made substantial efforts to curry favor with the White House. Trump has welcomed their overtures and named venture capitalist David Sacks as artificial intelligence and crypto czar.
Republicans have mixed views on the proposal
There’s no unanimity about the provision among congressional Republicans, even among those who are Big Tech critics.
Sen. Josh Hawley of Missouri told BI that he opposed the proposed moratorium, saying he didn’t “want to tamp down on people’s efforts to address” issues posed by AI.
“I would think that, just as a matter of federalism, we’d want states to be able to try out different regimes that they think will work for their state,” Hawley said. “And I think in general, on AI, I do think we need some sensible oversight that will protect people’s liberties.”
Sen. Ted Cruz of Texas, meanwhile, told BI he was “very supportive of the principle,” saying that AI should be regulated via national standards.
He also said he wanted to take an approach to AI similar to the one President Bill Clinton took on the internet in the 1990s — applying a “light touch regulatory approach” in order to win the AI race.
Silicon Valley shouldn’t be celebrating yet.
The House Energy and Commerce Committee will debate the provision and the rest of its section of the sweeping proposal on Tuesday. Other top House committees will need to approve their own language before a final bill can be brought to the floor. House Republicans are still divided on other matters, including to what extent to cut Medicaid, a federal program that covers 72 million Americans, predominantly with low incomes or disabilities.
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Even if the AI provision passes the House, it still needs to pass a special parliamentary review in the Senate. To ram Trump’s bill through expected Democratic opposition, Republicans must use a special procedure known as reconciliation. The trade-off is that all provisions of reconciliation bills must be primarily fiscal in nature.
It’s unlikely, as Bloomberg News reported, that the AI provision would meet that high bar. If it fails to, Republicans would be forced to strip it out of the bill or risk losing the special power that allows them to doge a likely Democratic-led filibuster that would effectively kill the entire bill.
“I don’t know whether that provision will survive on reconciliation, but as a substantive matter, it’s a policy I support,” Cruz said.
