In a decisive shift with far-reaching implications, the U.S. Senate has enacted a decade-long moratorium on state-level regulation of artificial intelligence, effectively consolidating AI oversight under federal authority through 2035.
Framed as a move to ensure regulatory uniformity, the measure has drawn praise from industry leaders who lobbied heavily for its passage. Critics, however, argue that the moratorium sidelines states at a critical juncture in AI’s societal impact, creating a governance vacuum that benefits tech giants.
Senate Moves AI Regulation Ban Forward
The U.S. Senate has taken a major step toward imposing a 10-year federal ban on state-level artificial intelligence (AI) regulations. This follows a ruling from the Senate parliamentarian confirming the provision complies with budget rules, allowing it to advance through reconciliation without needing 60 votes to overcome a filibuster. The press release regarding this announcement read,
This provision provides federal aid to states under the condition that states agree not to regulate AI. (Section 0012). The Parliamentarian’s advice is based on whether a provision is appropriate for reconciliation and conforms to the limitations of the Byrd Rule; it is not a judgment on the relative merits of a particular policy
The moratorium, originally passed by the House in May 2025, would block states from regulating AI models, systems, or automated decision tools for a decade.
Senate Commerce Committee Chair Ted Cruz played a central role in shaping the plan, linking eligibility for $42 billion in federal broadband funding under the Broadband Equity, Access, and Deployment (BEAD) program to states’ compliance with a 10-year ban on AI regulations.
To satisfy budgetary rules, Cruz structured the measure so that states enforcing AI laws would risk losing this funding. The Senate Parliamentarian has ruled that the provision complies with reconciliation requirements and is exempt from the Byrd Rule, allowing it to move forward in the GOP budget package with a simple majority, without needing Democratic backing or facing a filibuster.
Backlash Builds: Bipartisan Critics Warn of Federal Overreach
While supporters such as Cruz and Representative Jay Obernolte say the moratorium will protect against a chaotic mix of state regulations, the proposal has triggered significant backlash. A coalition of more than 500 state lawmakers, 40 state attorneys general, and advocacy groups, including Americans for Responsible Innovation, has condemned it.
They argue that the provision would strip away critical state-level protections for consumers without offering federal safeguards, creating a dangerous regulatory vacuum.
Criticism is not limited to Democrats. Several Republicans, including Senators Josh Hawley, Marsha Blackburn, Ron Johnson, Rick Scott, and John Cornyn, have expressed skepticism or outright opposition. Blackburn said in a statement that,
This is not the type of thing that we put into reconciliation bills, and we are working to move forward with legislation at the federal level, but we do not need a moratorium that would prohibit our states from stepping up and protecting citizens in their state.
More than 30 House Democrats have also branded the plan “textbook federal overreach,” warning it would force states to choose between essential broadband funding and their responsibility to safeguard the public from AI-related risks.
States Push Forward on AI Rules as Federal Fight Continues
Despite efforts in Congress to block state regulation of AI, several states are forging ahead with their measures. New York lawmakers have passed an AI safety bill awaiting Governor Kathy Hochul’s signature. Utah has implemented laws focused on AI transparency, and California Governor Gavin Newsom has approved targeted legislation on privacy and deepfakes, despite vetoing broader AI safety measures.
As of now, the moratorium’s fate remains unclear as the Senate and House reconcile their budget bills. Internal GOP divisions and growing bipartisan opposition could still sink the proposal, with upcoming negotiations deciding whether it stays in the final legislation.
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