A sweeping attempt to block states from regulating artificial intelligence was struck down Tuesday as the U.S. Senate voted 99-1 to remove the controversial measure from President Trump’s economic agenda. The AI moratorium had been bundled into the so-called “Big Beautiful Bill,” a landmark tax and spending package, and linked access to federal funding with a 10-year pause on state-level AI rules. The backlash was swift. Lawmakers across party lines rejected the provision, with Senator Marsha Blackburn withdrawing support at the eleventh hour, citing concerns over Big Tech overreach. The Senate’s decisive vote restored state authority over AI regulation.
State Leaders and Parents Defend Local AI Regulation
The AI moratorium’s collapse followed growing resistance from governors, parents, and privacy advocates. Originally pitched as a way to prevent a patchwork of conflicting state laws, the proposal became toxic when it was tied to broadband and infrastructure subsidies in the Big Beautiful Bill. Arkansas Governor Sarah Huckabee Sanders, speaking for a coalition of Republican governors, condemned the measure as “a free pass for Silicon Valley to operate without AI regulation.” More powerfully, parents of children harmed by AI systems stepped forward. Megan Garcia, whose son died after engaging with an AI chatbot, called the moratorium “a license to launch dangerous tech without guardrails.”
Senator Blackburn’s reversal proved critical. Once a supporter of Senator Ted Cruz’s five-year compromise version, she withdrew support, citing vague exemptions and overbroad language that risked shielding harmful AI from accountability. The Cruz-backed compromise aimed to preserve Tennessee’s ELVIS Act, which bans AI replication of artists’ voices. Yet opponents feared the moratorium’s language could still gut future AI safety laws under the guise of “undue burden.” Despite tech industry support, the Senate rejected federal overreach. Even Cruz eventually voted to kill the moratorium. The overwhelming vote restored states’ power to legislate on AI, especially when Washington drags its feet.
National AI Deregulation Plan Falls Flat in Face of Bipartisan Backlash
The AI moratorium aimed to impose federal supremacy over AI regulation, backed by industry giants and Senate Republicans eager to simplify compliance for tech firms. However, it ultimately met overwhelming bipartisan rejection. Crafted as a provision in Trump’s Big Beautiful Bill, the measure would have banned states from enforcing AI-related laws for 10 years. States that refused to comply would lose access to hundreds of millions in AI infrastructure funds. The political optics were poor: Silicon Valley-backed deregulation disguised as national policy. Senator Ted Cruz, who championed the proposal, pitched a revised version that included carve-outs for child protection and artist likeness laws.
But the compromise failed when Senator Marsha Blackburn withdrew support, citing concerns that the bill still gave “too much power to big tech.” Even Republican-led states, typically aligned with the GOP’s economic agenda, opposed the moratorium. Lawmakers feared that stripping states of authority would delay protections on deepfakes, biometric surveillance, and AI abuse. Critics say the measure’s failure is a rebuke of AI industry lobbying and a recognition that local governments are often the first to act when federal regulation stalls. The Senate’s 99-1 vote signals a rare but forceful stand against unchecked AI deployment.
What Comes After the Moratorium Meltdown?
The death of the AI moratorium leaves the U.S. without a federal framework for regulating artificial intelligence. But it also reaffirms the vital role of states in tech oversight. With the Big Beautiful Bill now moving forward without the contentious provision, Congress faces fresh pressure to act. Advocates are calling for comprehensive federal AI regulation that doesn’t preempt state protections. Until that happens, states will continue leading the way, enforcing laws on deepfakes, data privacy, and algorithmic discrimination. The moratorium’s defeat shows that lawmakers, regardless of party, are unwilling to outsource AI accountability to tech giants.
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