‘Big Beautiful’ Bill Blocking US State-Based AI Regulations Faces Strong Opposition

The Republican-backed “One Big Beautiful” tax bill includes a new provision that would bar US states and localities from regulating artificial intelligence for the next 10 years. Its sponsors argue that Congress should establish a unified national framework to prevent a fragmented patchwork of state laws.

“AI doesn’t understand state borders, so it is extraordinarily important for the federal government to be the one that sets interstate commerce,” Republican Senator Bernie Moreno said during a discussion of the provision at Capitol Hill, according to the Associated Press. “You can’t have a patchwork of 50 states.”

The AI provision was introduced shortly before the House Energy and Commerce Committee’s markup of the budget reconciliation bill. Following the committee’s approval, the bill advanced to the full House of Representatives. It may not be approved by the Senate if the addition is deemed to be a policy matter rather than budgetary item, which would violate the Byrd Rule.

The provision’s language applies to “artificial intelligence models, artificial intelligence systems, or automated decision systems,” covering a broad range of technologies from general-purpose chatbots to specialised industry tools.

Opposition to this AI provision

More than a dozen state attorneys general sent a letter to congressional leaders last week opposing the provision. “The impact of such a broad moratorium would be sweeping and wholly destructive of reasonable state efforts to prevent known harms associated with AI,” they wrote. 

Over 100 organisations, including academic institutions and employee coalitions, signed a similar letter a few days later, saying that “bad tech would be unaccountable to lawmakers and the public” if the bill were enacted with the provision.

OpenAI CEO supports a ‘light touch’ federal approach

OpenAI CEO Sam Altman said that a “patchwork” of AI regulations “would be quite burdensome and significantly impair our ability to do what we need to do” at a recent Senate hearing on AI competitiveness. “I think having one federal approach focused on light touch and even playing field sounds great to me,” he added.

Altman’s remarks mark a shift in tone among tech executives, many of whom, in 2023, signed a letter warning that AI posed a “society-scale risk” comparable to pandemics and nuclear war, and urged global leaders to prioritize mitigation. 

Attempts at state-level AI regulation

There have been some notable attempts at state-level AI regulation over the past few years, but most have met resistance. For instance, in September 2024, California Governor Gavin Newsom vetoed SB 1047, which would have been the strongest regulation on generative AI. However, over half of all US states have laws restricting the use of deepfakes relating to elections.

Trump administration views AI regulation as an economic obstacle

President Donald Trump’s approach to AI has long favored innovation over regulation. Eliminating compliance measures designed to prevent bias and protect AI consumers is part of a broader effort to attract tech companies that want to avoid regulatory delays. 

As soon as he took office for the second time, Trump reversed former President Joe Biden’s initiative to provide guidelines for “safe, secure and trustworthy” generative AI. He has been vocal in criticising Europe’s pro-regulation stance on AI, describing its ongoing regulatory battles and fines against tech companies as “a form of taxation” at the World Economic Forum in January.

Similarly, in a speech at February’s Paris AI Action Summit, Vice President J.D. Vance disparaged Europe’s use of “excessive regulation” and said that the international approach should “foster the creation of AI technology rather than strangle it.”
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