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WASHINGTON – U.S. Sen. Ted Cruz is trying to stop the nation from regulating artificial intelligence with GOP’s groundbreaking tax and spending bills, but is dealing with resistance from colleagues on both sides of the aisle.
An unusual alliance has been formed between Democrats and hard-line Republicans working on Cruz’s push as outside groups lobby the senators, launch targeted messaging campaigns and set the stage for floor fights.
The AI Moratorium, which Cruz has led for the past few weeks as chairman of the powerful Senate Commerce, Finance and Transportation Committee, will enable the state’s $500 million AI Infrastructure Fund to be deployed in the state if it regulates technology for the next decade. In Texas, the AI-regulation bill, which Gov. Greg Abbott just signed the law, is likely to put this money at risk.
Washington Sen. Maria Cantwell, the committee’s highest-ranking Democrat, raised concerns that the law loophole would in fact put the nation at risk the state’s access to President Donald Trump’s “one big beautiful bill” and all broadband funding in other laws. In a statement, she said the regulations would retain funds that “force hostages, encouraging consumers to choose to protect and expand important broadband infrastructure to rural communities.”
This issue is currently under review by the Senator.
GOP Sen. Marsha Blackburn of Tennessee, Josh Hawley of Missouri, Rand Paul of Kentucky, and Ron Johnson of Wisconsin are among the most enthusiastic opponents of Cruz’s moratorium.
Blackburn sent a letter Wednesday Wednesday, Senate majority John Thune, according to three people familiar with the issue that was given anonymity to discuss internal deliberations. According to two people who are familiar with push, Holy also signed the letter.
This letter was first reported by Punchbowl News. Cruz’s office did not immediately respond to requests for comment.
If the clause is not stripped of the bill before it is brought to the floor for a vote, the senator may suggest amendments to do so themselves. Republicans and Democrat senators discussed the possibility Thursday, according to Democrat aides.
Most of the Senate’s 47 Democrats appear to be flying along with their efforts to fight Cruz’s AI regulations. This means that only one handful of Chamber’s 53 Republicans will need to be in exile from Cruz to pass the amendment.
On former Trump aide Steve Bannon’s podcast on Tuesday, Holy vowed to remove the moratorium from the bill. “If we can’t remove it from this bill, we’ll come back with another bill to the floor where we strip it up,” he said. Paul told the Tribune Thursday that if offered, he would support the amendment.
Senator John Cornyn is “concerned” about the provision, citing uncertainty about how the new state’s AI laws will be affected. But he also reluctantly said Thursday that he would be able to impose federal regulations on AI, saying Congress could “do what it could keep up with evolving technology.”
Americans for Responsible Innovation, a nonprofit public policy advocacy organization, lobbying Congressional members against AI provisions, claiming it could violate state rights and undermine consumer protection. “Whether it’s workforce concerns or online safety, we may be seeing new concerns over the next decade. We want to make sure our state legislators have the capacity to respond.”
With Texas’ new AI law set to come into effect in 2026, states and AI leaders are worried about limiting lawmakers’ ability to legislate rapidly developing technologies by preventing them from losing federal funds.
R-Mckinney State Sen. Angela Paxton opposed Cruz’s regulations this week, calling it “Federal Overreach.”
“Texas could not implement common sense protections to protect children from deep AI child pornography or other bipartisan AI regulations that have just been signed into law,” she said.
Brendan Steinhauser, CEO of Texas-based Secure AI’s nonprofit alliance, said the state has “persuasive interest” in protecting its citizens, while serving as a laboratory that can test the statute and use as a basis for federal regulations.
Alliance for Secure AI is launching a paid marketing campaign to highlight past warnings from conservative politicians, including Cruz.
They will target conservative audiences through Fox News streaming, Newsmax and online advertising, focusing on Washington audiences.
However, AI Moratorium supporters argue that the 50 state patchwork of laws will put AI companies in unnecessary tensions and regulatory burdens, hampering growth and innovation. This could put our based companies at a disadvantage, they argue.
“We are competing in the race with China to lead the future of artificial intelligence,” said Doug Kelly, CEO of the Tech-Aligned American Edge project. “The fractured state-by-state system just slows us down.”
According to a spokesperson for Pro-Tech Group, the American Innovators Network also supports the moratorium through its Senate office and engagement with targeted email, phone calls and texts, through lobbying to Congressional members.
However, innovation is not a top priority for some AI groups.
“When the federal government says nothing, when the state is completely blocked, you decide on their behalf that innovation is prioritized over everything else,” he believes innovation is essential to America’s interests, but past laws that prioritized innovation, such as free trade agreements, “had an impact on Americans,” Beale said.
The house originally passed a stricter version of the AI moratorium that banned restrictions. But the Senate Congress guardrail complicated the outlook for the upper room.
The law must have a direct budget impact to move Trump’s bill forward at a 50-vote threshold, rather than the filibuster-proof 60-vote threshold normally required to advance the bill from the Senate.
To pass this test, Cruz changed the law sent by the House to raise funds for contracts to not regulate AI rather than simply banning such regulations.
In May, Cruz Shepherd carried out the act of sharing such photos with federal crime through Congress, which calls for a platform to remove non-consensual nude images generated by AI or Real. Trump signed the bill last month.
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