House Republicans are advancing a sweeping move to take federal control of AI regulations, potentially sidelining states and boosting Big Tech. In addition to the new budget bill, they introduced a provision that would block states from passing or enforcing AI-related laws for the next ten years. The move immediately sparked backlash from Democrats, civil rights advocates, and even some Republicans, as concerns mount over giving Big Tech a free pass.
A Decade-Long Ban on State AI Regulation
The provision, introduced by Representative Brett Guthrie of Kentucky, would bar states and local governments from creating or enforcing laws around AI until 2035. If passed, it would freeze hundreds of proposed state laws covering AI bias, consumer protection, and algorithm transparency. Guthrie said the goal is to protect national AI modernization and prevent state laws from jeopardizing technological leadership.
The clause appears in a section of the bill allocating $500 million to the Department of Commerce to update federal IT systems using commercial AI tools. While the funding aims to strengthen cybersecurity and streamline services, it’s the regulatory language buried in subsection (c) that’s drawing national attention. Critics say it strips power from states just as they begin to respond to the growing influence of AI in daily life.
Big Tech Backs Federal AI Rule
The proposal delivers a clear win to Big Tech firms like Meta, OpenAI, and Alphabet, which have repeatedly urged lawmakers to avoid a patchwork of state AI rules. Industry leaders argue that inconsistent regulations stifle innovation and burden companies with costly compliance measures. The decade-long ban would give companies breathing room to expand AI systems without facing local legal challenges.
Supporters like Senator Ted Cruz have backed the measure, comparing it to the internet tax moratorium of the 1990s. He called it a smart “light touch” approach to AI governance that would allow the technology to mature under federal supervision. Others on the right echoed that view, insisting that Washington, not individual states, should set the rules. But critics see a different story. They say the proposal hands too much power to tech companies and shuts down state efforts to protect consumers. More than 30 states had already introduced AI-related bills this year, many of them focused on algorithmic fairness and safeguarding civil rights.
GOP Splits as Democrats Push Back
Not all house republicans are in favor of blocking state-level AI regulation. Senator Josh Hawley of Missouri has raised concerns about eliminating states’ ability to experiment with regulatory policies. “Federalism requires that states play a role in governance, particularly when it comes to something as powerful and pervasive as artificial intelligence,” Hawley said in a recent interview.
Senator Ed Markey warned that the moratorium could hurt marginalized communities already impacted by biased algorithms and unregulated AI tools. “We need AI protections, not corporate loopholes,” he said on social media. Critics noted AI already shapes hiring, healthcare, parole decisions, healthcare eligibility, and even parole outcomes, areas where regulation is crucial.
The Senate and Legal Challenges Ahead
The House Republicans have now included the proposal in their approved budget package heading to the Senate. Whether it survives will depend on parliamentary rules and political pressure. Some analysts say it may be struck down if it doesn’t meet budget reconciliation requirements. Even if it passes, states like California and Illinois, both leaders in AI legislation, are expected to challenge the provision in court.
Still, the attempt marks a significant shift. For the first time, Congress is weighing whether to centralize AI regulation and sideline the states entirely. As AI continues to shape industries and influence everyday life, the outcome of this fight could define how the U.S. governs one of its most powerful technologies. With lawmakers split and legal fights looming, the debate over who should control AI is far from over.
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