Republicans have launched a bold 10-year moratorium on state AI regulations through the “One Big Beautiful Bill,” threatening to withhold crucial tech funding from states that attempt to impose their own AI governance.
Key Takeaways
- Senate Parliamentarian Elizabeth MacDonough has ruled that the Republican proposal to temporarily block states from regulating AI can remain in the One Big Beautiful Bill.
- States that agree not to regulate AI until 2035 would be eligible for participation in a $500 million Department of Commerce IT modernization program.
- The provision has created unusual political alliances, with both Democrats and some Republicans opposing the measure over states’ rights concerns.
- Senator Ted Cruz rebranded the initiative as a “temporary pause” to gain more support, arguing for federal standards over patchwork state regulations.
- Critics fear the moratorium gives Big Tech too much freedom while potentially enabling censorship of conservative voices.
Federal Power Play: AI Regulation Freeze Survives Procedural Challenge
The Republican effort to prevent states from regulating artificial intelligence cleared a significant hurdle on June 21 when Senate Parliamentarian Elizabeth MacDonough ruled that the provision could remain in the One Big Beautiful Bill. This strategic move allows the controversial measure to proceed through Congress’s reconciliation process, requiring only a simple majority for passage rather than the standard 60-vote threshold. The proposal effectively creates a 10-year moratorium on state-level AI regulation, with funding consequences for states that choose to implement their own AI governance frameworks.
The initiative, originally spearheaded by Senator Ted Cruz, ties states’ eligibility for participation in a $500 million AI fund to their willingness to abstain from implementing AI regulations. This represents a scaled-back version of Cruz’s initial proposal, which would have denied states access to the much larger $42 billion Broadband Equity, Access, and Deployment (BEAD) program. The modification was necessary to gain broader Republican support and satisfy Senate procedural rules, though significant opposition remains from both sides of the political aisle.
Unusual Political Alliances Form Against AI Moratorium
The AI regulation pause has created strange bedfellows in Washington, with both Democrats and populist Republicans finding themselves aligned against the measure. Senator Marsha Blackburn, a Republican from Tennessee, has emerged as a vocal opponent, citing concerns about protecting Americans and creative communities from potential AI harms. Her position reflects broader anxiety among conservatives that state-level protections against AI-facilitated censorship might be undermined by a federal moratorium, particularly in states where protections for conservative speech are being developed.
Democratic opposition, led by Senator Maria Cantwell, focuses on how the moratorium would nullify existing state protections. Cantwell argues that 24 states have already begun implementing AI regulations that fill critical gaps while federal action remains pending. The proposal threatens these laws, potentially leaving hundreds of millions of Americans vulnerable to AI-related harms with no immediate protective framework in place. This concern resonates across party lines, contributing to the fragile status of the provision within the larger bill.
• Americans, please review the list below. Anything that you think should be changed/trimmed? The document link is at the bottom. @senategop, please consider improving the bill with the suggestions from House Freedom Caucus that didn’t get adopted.
• “Here are 50 reasons… https://t.co/ovO50zxFav pic.twitter.com/sKIl0Q1tnc
— Conservatism Prevents Tyranny (@SaveLibertyUS) June 8, 2025
Cruz’s Vision: Innovation versus Regulation
Senator Cruz and his supporters defend the moratorium as essential for preventing a fragmented regulatory landscape that could stifle American innovation in the rapidly evolving AI sector. They argue that a unified federal approach would be more effective than a patchwork of potentially contradictory state regulations. This position aligns with traditional conservative economic philosophy favoring minimal government interference in emerging technologies and markets. Cruz has specifically emphasized how light-touch regulatory frameworks have historically benefited American technological advancement.
“History has shown that this light-touch regulatory approach to new technologies has been incredibly successful in promoting American innovation and jobs,” stated Senator Cruz.
The proposal has garnered support from notable figures in Trump’s orbit, including AI adviser David Sacks, who sees the pause as a necessary counterbalance to what he terms “AI Doomerism” – excessive fear-based regulation that could hamper technological progress. Vice President JD Vance has expressed uncertainty about the provision’s ultimate inclusion in the final bill, reflecting the complicated political calculus surrounding the issue. The final outcome may depend on whether Senate Republicans can maintain unity on this issue amid growing concerns from their populist wing.
The Big Tech Question: Protection or Overreach?
Critics of the moratorium, particularly from the populist right, view the provision as a gift to Big Tech companies eager to avoid regulatory scrutiny. Mike Davis of the Internet Accountability Project has been particularly vocal, suggesting the ten-year pause effectively gives technology giants free rein to deploy AI technologies with minimal oversight, potentially enabling censorship of conservative voices online. This perspective resonates with members of the House Freedom Caucus, who have expressed similar concerns about protecting free speech in the digital age.
Despite clearing the parliamentarian’s review, the AI regulation pause faces an uncertain future as the One Big Beautiful Bill moves to the Senate floor. Both Democratic and Republican senators are preparing amendments to modify or remove the provision. While the reconciliation process offers Republicans a streamlined path to passage with their slim majority, internal divisions within the GOP may ultimately determine whether this controversial measure survives to become law, setting the course for how America approaches AI governance for the next decade.
