The United States is approaching enacting federal measures to clean up individual states to strip individual states to regulate artificial intelligence (AI).
The 10-year state ban on AI regulation and surveillance, wearing shoes on President Donald Trump’s 1,000-page “One Big Beautiful Bill” Act (OBBBA) 2025″ was narrowly passed by the House last week by the House with a thin 215-214 votes.
The bill, also known as HR.1, is a budget adjustment bill that includes a variety of tax, immigration and health care legislative items aimed at guiding President Trump’s domestic policy agenda and campaign promises.
If approved by the US Senate and signed into law by Trump, the proposed 10-year moratorium on state AI laws marks a major shift in US technology policies and potentially shaping AI regulations in other countries like India.
What does the bill say about AI?
The AI Moratorium has been inserted under section 43201 of the OBBBA and has ordered the Department of Commerce to deploy funds to modernize and protect federal information technology systems through the deployment of commercial artificial intelligence, and “should be adopted to increase operational efficiency and service delivery, automation and cybersecurity.”
The relevant provisions state that “…there are no laws or regulations governing artificial intelligence models, artificial intelligence systems, or automated decision systems in the decade starting from the date of this law’s enactment.”
This means that US states will be blocked from enforcing laws regulating AI and “automatic decision systems” for a decade.
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The proposed suspension of AI regulations by the state legislature on AI regulations could affect more than 60 AI-related state laws enacted to date. These laws aim to address a variety of issues, from algorithmic discrimination to government AI use. According to a report by The Verge, there are also hundreds of other AI-related bills currently under consideration by the state.
Experts point out that the bill’s broad definition of “automated decision systems” could lead to a suspension of regulations covering other types of computing systems other than AI.
Who supports moratoriums?
Republican lawmakers, tech companies, business groups such as the US Chamber of Commerce and free market think tanks like the R Street Institute are supporting the measure.
They argued that a temporary suspension on state-level AI regulations was necessary. Because it helps to promote innovation among US businesses and stay ahead of Chinese competitors in high-stakes AI races. Openai, the company behind ChatGpt, greatly reflected these debates in its submission to Trump’s AI Action Plan. To prevent suspected privacy and security risks, models released by the Chinese AI Lab Deepseek have now become banned in the US.
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Supporters further said the moratorium will address the confusing patchwork of AI laws being enacted by states, giving the US Congress plenty of time to draft their own AI laws at the federal level.
Who is opposed to this measure?
Democrats and some Republicans are opposed to AI moratoriums, along with dozens of other state lawmakers, attorney generals, AI experts, civil society organisations, and civil society organisations that focus on technology policy and consumer rights.
A key concern is that temporary suspensions could give AI companies greater room to leave consumers, particularly vulnerable communities and children at risk associated with AI. Defenders also argue that the loose definition of “automated decision making systems” can be used to roll back the gusts of state-level laws currently in place to protect people from deepfakes, and to hire discrimination by automated systems.
“We certainly know that Tennessee needs these protections,” Republican Sen. Marsha Blackburn was quoted as saying by the Washington Post. Others oppose the suspension of AI state law, citing federal overreach.
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“As a federalist issue, I think we can test the different regimes that states think will work for their nation, and I think in general, AI needs wise surveillance to protect people’s freedom.”
Meanwhile, an open letter from state legislators and AI expert Gary Marcus said the moratorium could violate the 10th amendment to the US Constitution.
“The federal government should not control literally every aspect of how a nation regulates AI, especially when they themselves fall into work. And the constitution makes it pretty clear that the written bill is far too broad.”
How did the tech companies respond? What is their stance?
Openai CEO Sam Altman, who appeared before the US Senate Commerce Committee earlier this month, said emulating the European Union’s regulatory system would be disastrous for the tech industry. He also struck for a unified approach to AI regulation.
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“It is extremely difficult to imagine coming up with ways to adhere to 50 different sets of regulations. It is a light touch, one of the understandable federal frameworks, and can move at a speed that demands this moment.
Alexandr Wang, founder and CEO of Data Company Scale AI, also opposed state laws relating to AI. “We need one clear federal standard, as an industry and as a nation, whatever it is. But we need to be clear about one federal standard and we need a preemption to prevent this outcome, with 50 different standards,” he said in testimony to the U.S. House Committee.
However, Dario Amody, CEO of American startup humanity, suggests he is against the AI moratorium. “If you’re driving a car, one thing is to say, ‘You don’t need to drive with the steering wheel right now.’ “We’re going to rip the handle and we can’t go back for 10 years,” is another thing to say,” Amodei was quoted as being discovered wired at Amazon-sponsored Startup’s first developer meeting last week.
What’s next?
The fate of the OBBBA is considered to be uncertain as it progresses to the US Senate. There, it is expected that Democrats and a small number of Republicans will challenge the inclusion of AI moratoriums in their budget packages for bird rules reasons. The rules specifically prohibit the addition of “unrelated” provisions to the budget adjustment bill.
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Apart from the suspension of state AI laws, OBBBA also proposes eliminating the green energy tax credits for those who purchase eligible electric vehicles and undertake other renewable energy projects, such as household refueling infrastructure.
The budget package also includes billions of dollars worth of funds to secure US boundaries through “ground detection sensors, integrated surveillance towers, tunnel detection capabilities, unmanned aerial vehicles systems (UAS) and enhanced communications equipment.”
