A controversial federal proposal that would ban states and local governments from regulating artificial intelligence (AI) for 10 years is currently at a standstill, as lawmakers debate its inclusion in a GOP megabill ahead of a key July 4 deadline. The provision, which would prohibit states from enforcing any law or regulation related to AI models, systems, or automated decision systems, has sparked intense debate among both supporters and critics.
Proponents of the proposal, including OpenAI's Sam Altman, Anduril's Palmer Luckey, and a16z's Marc Andreessen, argue that a "patchwork" of AI regulation among states would stifle American innovation at a time when the race to beat China is heating up. However, critics, including most Democrats, many Republicans, labor groups, AI safety nonprofits, and consumer rights advocates, warn that the provision would block states from passing laws that protect consumers from AI harms and would effectively allow powerful AI firms to operate without much oversight or accountability.
The AI moratorium has faced opposition from a diverse group of stakeholders, including 17 Republican governors who wrote to Senate Majority Leader John Thune and House Speaker Mike Johnson calling for the provision to be stripped from the budget reconciliation bill. The provision was squeezed into the bill, nicknamed the "Big Beautiful Bill," in May and has since undergone revisions to tie compliance with the AI moratorium to states receiving funds from the $42 billion Broadband Equity Access and Deployment (BEAD) program.
The moratorium's reach extends far beyond a few examples, as Public Citizen has compiled a database of AI-related laws that could be affected by the moratorium. The database reveals that many states have passed laws that overlap, which could actually make it easier for AI companies to navigate the "patchwork." For instance, Alabama, Arizona, California, Delaware, Hawaii, Indiana, Montana, and Texas have criminalized or created civil liability for distributing deceptive AI-generated media meant to influence elections.
The AI moratorium also threatens several noteworthy AI safety bills awaiting signature, including New York's RAISE Act, which would require large AI labs nationwide to publish thorough safety reports. Critics argue that the provision would take away all leverage and any ability to force AI companies to come to the negotiating table.
Opponents and cynics alike say the AI moratorium isn't about innovation – it's about sidestepping oversight. While many states have passed regulation around AI, Congress, which moves notoriously slowly, has passed zero laws regulating AI. One of the loudest critics of the proposal is Anthropic CEO Dario Amodei, who argues that a 10-year moratorium is far too blunt an instrument and that the government should work with AI companies to create a transparency standard for how companies share information about their practices and model capabilities.
The opposition isn't limited to Democrats, as notable Republican opposition to the AI moratorium has emerged, arguing that the provision stomps on the GOP's traditional support for states' rights. A recent Pew Research survey found that most Americans seem to want more regulation around AI, with about 60% of U.S. adults and 56% of AI experts saying they're more concerned that the U.S. government won't go far enough in regulating AI than they are that the government will go too far. Americans also largely aren't confident that the government will regulate AI effectively and are skeptical of industry efforts around responsible AI.