President Donald Trump’s “Big Beautiful Bill” is drawing fire for proposing a 10-year AI moratorium on state-level AI regulations. The controversial moratorium, buried in Subtitle C, Part 2 of the bill, would block states from enforcing any restrictions on AI or automated decision systems involved in interstate commerce. A coalition of 260 state lawmakers has sent a letter opposing the measure, calling it undemocratic and dangerous. Critics argue that the freeze would stifle state-led innovation and prevent local governments from addressing emerging AI risks. The backlash reflects growing tension between federal oversight and state autonomy in the era of artificial intelligence.
State Lawmakers Push Back on AI Moratorium
The AI moratorium in Trump’s tax and budget bill is facing bipartisan resistance. The letter from state lawmakers warns that banning state regulation would halt critical progress on AI accountability. Many states, including California, Colorado, Utah, and Tennessee, have enacted laws to regulate the deployment of AI in sensitive areas such as healthcare, education, and criminal justice. Others have legislation pending. State leaders argue that a decade-long regulatory blackout would lock them out of the national conversation on AI safety and governance. Their letter calls for rejecting any clause that strips states of their ability to legislate on emerging technologies. They urge Congress to support, not suppress, thoughtful policy solutions.
The bill’s language claims the goal is to “facilitate the deployment” of AI systems by eliminating fragmented regulations. However, the National Association of State Chief Information Officers said in a separate letter they were “extremely concerned,” warning the provision would handcuff state agencies at a time when responsible AI is urgently needed. Federal preemption of AI regulation has become a flashpoint in tech policy. With lawmakers like Senators Josh Hawley and Marsha Blackburn also voicing objections, this AI freeze could become one of the bill’s most debated provisions in the months ahead.
What the AI Freeze Actually Covers?
The bill outlines sweeping definitions that would shield a wide range of AI technologies from state regulation. It defines an “AI model” as any software using AI, machine learning, or statistical modeling to generate outputs. An “AI system” includes any data platform, tool, or device partially or fully operating with AI. And an “automated decision system” refers to any AI-powered process that influences or replaces human decisions. Under this language, nearly all advanced software used in commerce, from AI hiring tools to facial recognition and predictive analytics, could be exempt from state laws.
This means states wouldn’t be able to enforce rules on transparency, bias testing, or data protection around AI systems, even if those tools affect public safety, employment, or healthcare. Critics argue the bill would create a regulatory vacuum. With no clear national framework yet in place, it risks allowing unchecked AI proliferation. Opponents say that without oversight, the AI industry could sidestep important consumer protections, especially in high-stakes sectors. The broad scope of the ban has alarmed policy experts. They point out that the very systems influencing credit scores, job offers, or law enforcement actions would be operating beyond the reach of state law for a full decade.
Future of AI Governance Hangs in Balance
Trump’s AI moratorium has reignited a national debate on tech governance. While the administration argues for innovation without barriers, critics see a dangerous power grab that silences states’ rights. With bipartisan pushback building and existing state laws under threat, the proposal faces an uphill battle in Congress. The coming weeks will determine whether federal lawmakers back a uniform, innovation-first approach or preserve the ability of states to craft their own AI policies. As artificial intelligence becomes more integrated into daily life, this fight may shape how power and responsibility are distributed in the age of autonomous technology.
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