In a surprising move, U.S. House Republicans have introduced a clause in their major tax bill aiming to block states and local governments from regulating artificial intelligence (AI) for the next decade.
This unexpected addition has caught tech industry experts off guard and sparked outrage among state officials who see it as federal overreach. The provision, though brief, could have significant implications for how AI is governed across the United States, potentially giving tech companies more freedom to develop AI technologies without state-level restrictions.
“Congress is incapable of meaningful AI regulation to protect the public,” said California State Senator Scott Wiener. “It is, however, quite capable of failing to act while also banning states from acting.”
While the tech industry has lobbied for uniform and light-touch regulation, many states have taken steps to address concerns around AI, particularly regarding deepfake technology in political campaigns. According to Public Citizen, a watchdog organization, half of all U.S. states have enacted laws regulating AI-generated deepfakes in elections.
The clause’s future is uncertain, as it may face hurdles in the Senate due to procedural rules. Senator John Cornyn, a Republican from Texas, expressed doubts about its viability. “I don’t know whether it will pass the Byrd Rule,” he noted, referencing the requirement that budget reconciliation bills focus primarily on budgetary matters. “That sounds to me like a policy change… I think it is unlikely to make it.”
A bipartisan group of state attorneys general has also voiced opposition. South Carolina Attorney General Alan Wilson, a Republican, stated, “AI brings real promise, but also real danger, and South Carolina has been doing the hard work to protect our citizens. Now, instead of stepping up with real solutions, Congress wants to tie our hands and push a one-size-fits-all mandate from Washington without a clear direction. That’s not leadership; that’s federal overreach.”
Despite growing interest in AI regulation within Congress, significant bipartisan legislation has yet to advance. With the proposed ban stirring controversy, the debate over who should control AI regulations—federal or state governments—is heating up, with potential impacts on the future of technology and governance.
