| Trump’s “One Big Beautiful Bill” passes House, threatens state AI laws |
 Source: Kendall Hoopes |
| In Washington, D.C., the U.S. House of Representatives has passed President Trump’s federal budget bill that includes a controversial 10-year bar on any U.S. state or city from regulating AI, with the legislation now moving to the U.S. Senate for consideration. The bill passed by the narrowest possible margin — 215-214 — with all Democrats and two Republicans voting against it. |
| What’s at stake: Buried 291 pages into the 1,116-page bill, Section 43201(c) describes a 10-year moratorium on state-level enforcement of “any law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems”. The federal ban would immediately nullify more than 20 California AI laws passed just last year and freeze about 30 new bills currently under consideration in Sacramento. California’s upcoming transparency law requiring generative AI developers to document their training data would be impossible to enforce. Laws banning AI deepfakes and requiring disclosure when patients interact with AI instead of humans would be swept aside. Even pending bills forcing insurance companies to report AI-driven coverage denials would be dead on arrival. |
| The arguments: Supporters, including Rep. Brett Guthrie (R-Ky.), argue that differing laws in 50 states would create an impossible regulatory patchwork. Rep. Jay Obernolte (R-Calif.) called it “nonsensical” to invest in a national AI strategy while allowing “1,000 different pending bills in state legislatures” to become law simultaneously. |
| They point to historical precedent: the Internet Tax Freedom Act of 1998, which blocked new state internet taxes for ten years to nurture the fledgling e-commerce sector. “The results were extraordinary,” said Sen. Ted Cruz (R-Texas), suggesting AI needs similar breathing room. |
| The pushback: California Attorney General Rob Bonta joined a bipartisan coalition of 40 attorneys general urging Congress to drop the idea, calling broad preemption “irresponsible” and warning it would “deprive consumers of reasonable protections” in the absence of federal rules. |
| The California Privacy Protection Agency cautioned that the moratorium “could rob millions of Americans of rights they already enjoy,” including privacy safeguards voters enshrined in 2020. Congresswoman Jan Schakowsky (D-Ill.) blasted the moratorium as “a giant gift to Big Tech,” saying it enables deepfakes and permits unchecked profiling of citizens. |
| The measure passed a House committee on party lines but faces scrutiny in the Senate, where rules against unrelated policy riders could derail it. |
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| History shows that smart regulation often drives innovation, not stifles it. Aviation boomed under FAA safety standards because people trusted planes were safe. Pharmaceuticals advanced after stricter drug approval rules weeded out dangerous snake oil. Banking regulations restored trust after the Great Depression, enabling decades of financial innovation. |
| Without guardrails, we risk AI disasters that could set the field back years. Imagine autonomous vehicles rushed to market causing fatal accidents, or AI medical tools misdiagnosing patients. Nothing kills innovation faster than customers losing trust. |
| California Sen. Scott Wiener called it “a horrible provision to override all state regulation of AI for ten years,” noting “California would no longer be able to ban or regulate deepfake revenge porn, which could also include fake kiddie porn”. |
| A ten-year federal pre-emption would concentrate every dispute over algorithmic accountability in Washington, handing Congress a tight deadline to craft national guardrails. Done well, it could deliver uniform clarity; done late, it risks a regulatory vacuum where deep-fakes, opaque health bots, and biased decision systems roam unchecked. |
| The narrow House passage and growing Senate opposition suggest this provision may not survive — but the fact that it got this far is very interesting. |
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