A new political flashpoint has emerged as a powerful House committee inserts a sweeping AI regulation ban into President Donald Trump’s tax and spending bill. If passed, the provision would prevent states from enacting AI laws for the next 10 years—a move applauded by Big Tech and criticized by AI safety advocates.
The draft bill, revealed late Sunday by the House Energy and Commerce Committee, prohibits any “law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems.”
Tech giants like OpenAI, Meta, and Google have long pushed for uniform federal AI standards, arguing that varying state regulations could stifle innovation and inflate compliance costs. However, critics say the proposed federal override is a “giveaway” to Silicon Valley.
State AI Laws Under Threat Amid Industry Pressure
The AI regulation ban hits just as a wave of legislation is sweeping the U.S. Just in 2025, 45 states and Puerto Rico introduced more than 550 AI-related bills according to the National Conference of State Legislatures. State legislators, especially in California, New York, and Illinois, are in some instances taking aggressive action – pushing forward proposals that relate to inspection and monitoring of consumer usage of AI; algorithmic transparency; and focusing on child protection, etc.
California recently faced opposition from OpenAI and large VC companies like Andreessen Horowitz that killed a proposed bill regulating AI and consumer safety. The bill was vetoed by Governor Gavin Newsom but this time around, lawmakers will attempt a more focused approach.
Critics Warn of Danger to AI Safety and Consumer Rights
AI safety groups and consumer rights advocates warn that the provision could significantly delay efforts to regulate emerging technologies. President of Americans for Responsible Innovation, Brad Carson called the measure “a giveaway to Big Tech that will come back to bite us.”
Critics worry the freeze will allow AI developers to operate in a regulatory vacuum, potentially putting children, consumers, and small businesses at risk. They also argue that halting state-level innovation undermines democratic oversight and experimentation.
A Looming Federal Showdown on AI Lawmaking
Although the AI language may not survive the Senate due to budget reconciliation rules, its inclusion in the GOP-backed bill sends a strong message: key Republicans want to centralize AI governance and preempt state laws. This early legislative maneuver could shape how AI is regulated—or deregulated—for the next decade.
With over 500 state-level AI bills introduced this year and growing bipartisan concerns about AI harms, the battle over who controls the future of AI regulation is only just beginning.
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