One of the most controversial provisions of the GOP’s “big and beautiful bill” was stripped of the law overnight as Senate Republicans rushed to pass the Hodgepodge tax and spending package. Now, the bill moves forward without the proposed 10-year suspension in states passing its own laws regulating artificial intelligence.
Tennessee Republican Sen. Marsha Blackburn has introduced amendments to remove the suspension from the bill.
The overwhelming 99-1 vote to remove it comes after Blackburn shortened the moratorium period from 10 to five years after he retreated from a compromise deal between her and Texas Sen. Ted Cruz, giving the state the ability to enact and enforce laws related to child online safety.
Blackburn said there is still concern that the new regulations could have allowed Big Technology to continue to exploit children, creators and conservatives.
“We appreciate President Cruz’s efforts to find acceptable languages that enable the nation to protect its citizens from AI abuse, but the current languages are not acceptable to those who need these protections the most,” Blackburn said in an emailed statement to NBC News. “Congress cannot prevent states from enacting laws that protect citizens until they pass federal preemptive laws like the Children’s Online Safety Act and the Online Privacy Framework,” the law passed 51-50 on Tuesday.
As Congress is slow to pass AI regulations, states have already passed their own laws focused on preventing certain harm from AI technology. State law primarily aims to use Deepfake technology to create unconsensual pornography, misleading voters about specific issues or candidates, or to mimic the voices of music artists without permission.
Some major players leading the US AI industry have argued that a mix of state laws would hum technology unnecessarily, especially as the US is trying to compete with China. But a wide range of opposition, including several prominent Republican lawmakers and civil rights groups, says the state is a necessary breakwater against dangerous technologies that could cause unknown harm in the next decade.
The Trump administration has made it clear it wants to loosen its reins regarding AI expansion. In his first week of office, President Donald Trump signed an executive order to ease restrictions on technology and revoke “existing AI policies and instructions that serve as barriers to American AI innovation.”
And in February, Vice President Vance gave a speech at the AI Summit in Paris.
However, a study from the Pew Research Center in April found that far more Americans who are not AI experts were more concerned about AI risk than potential benefits.
“Congress has shown that we can’t do much in this field,” Larry Norden, vice-president of the election and government programs at the Brennan Center, a New York University nonprofit advocate for democratic issues, told NBC News.
“We’re going to prevent the state from doing anything in order to say we’re not doing anything. As far as I know, it’s unprecedented. It’s really dangerous, especially given the interests of this technology,” Norden said.
The provisions for the Omnibus package were introduced by the Senate Commerce Committee, chaired by Cruz. Cruz’s office has postponed comments to the committee. This states that it wants a share of substantial federal investment in AI under the rules originally proposed.
All Senate Democrats voted against the omnibus bill. However, some Republicans said they opposed state moratoriums passing AI laws.
Josh Hawley of Missouri, Jerry Moran of Kansas, and Ron Johnson of Wisconsin.
Georgia Rep. Marjorie Taylor Greene, posted to X earlier this month and signed the House version of the bill, didn’t realize the state wouldn’t create its own AI law.
“Full transparency, I didn’t know about this section,” Green wrote. “We don’t know what capabilities AI will be able to demonstrate over the next decade. It’s potentially dangerous to tie free reins and state hands.”
Blackburn previously said she opposed the 10-year suspension.
“We cannot ban Americans from protecting AI from harm across the country, including Tennessee’s vibrant creative communities,” she said in a statement provided to NBC News. “For decades, Congress has been able to control virtual spaces and prove that it is unable to pass laws to prevent vulnerable individuals from being exploited by big technology.”
State lawmakers and the attorney generals of both parties also opposed AI provisions. The open letter, signed by 260 state lawmakers, expressed “strong opposition” to the moratorium. “Over the next decade, AI will raise some of the most important public policy issues of our time. It is important that state policymakers maintain their capacity to respond,” reads the letter.
Similarly, 40 state attorney generals of both parties expressed their opposition to the provisions in letters to the legislature. “The impact of such a widespread moratorium will wipe out and completely destroy the rational state efforts to prevent known harm related to AI,” they wrote.
An analysis by the Brennan Center found that 149 existing state laws have been overturned.
“State regulators are trying to enforce laws to protect their citizens, and they are instituting common sense regulations that seek to protect the worst kind of harm that is emerging on them from their members,” says Sarah Meyers West, co-op of the AI Now Institute, who calls for AI to benefit NBC.
Tech companies like AI and Google and Microsoft have argued that a pause is necessary to compete with China in the industry.
“There is growing awareness that the current patchwork approach to regulating AI is not working and staying in this path will continue to get worse,” Chris Lehane, Openai’s Chief Global Affairs Officer, wrote on LinkedIn. “I’m not the one I usually quote, but Vladimir Putin says that anyone who wins will determine the direction of the world going forward.”
“We cannot afford to wake up to a future where 50 different states have enacted 50 conflicting approaches to AI safety and security,” Fred Humphries, corporate vice president of US government affairs at Microsoft, said in an email.
The Pro Business Lobby Chamber of Commerce has released letters signed by industry groups such as the American Independent Petroleum Association and the Meat Institute in support of the moratorium.
“More than 1,000 AI-related bills have already been introduced at the state and local levels this year. Without a federal moratorium, there will be an increasing patchwork of state and local laws that will significantly limit the development and deployment of AI,” they write.
Conversely, a diverse set of 60 civil rights groups, ranging from the American Civil Liberties Union to the digital rights groups and the NAACP, have signed their own open letters claiming that the state will pass its own AI law.
“Moratoriums can hinder the state enforcement of civil rights laws, which already prohibit discrimination by algorithms, and impact consumer protection laws by limiting the ability of both consumers and the state attorney general to seek replies on bad actors and completely eliminating consumer privacy laws,” the document says.
The Nonprofit National Center on Sexual Exploitation opposed the moratorium last week, highlighting how AI used minors for sexual exploitation.
AI technology generates child sex abuse material and is already being used by minors in grooming and etort, says Hailey McNamara, senior vice president of the group’s strategic initiatives and programs.
“The AI moratorium on the budget bill is a Trojan horse that ends the state’s efforts to curb sexual exploitation and other harm caused by artificial intelligence. This provision is highly reckless and, if passed, will lead to further weaponization of AI for sexual exploitation,” McNamara said.
