Trump's Bill: AI Regulation Ban?

Trump's Bill Proposes AI Regulation Ban: A Controversial Move

A federal measure tucked into US President Donald Trump’s ‘One Big Beautiful Bill Act (OBBBA) 2025’ seeks to halt state-level AI regulation for a decade, sparking intense debate among lawmakers, tech companies, and civil society groups. The proposal, known as the AI moratorium, aims to streamline AI policy by preventing states from enforcing laws on artificial intelligence and automated decision systems for 10 years. Critics argue it could expose consumers to risks, while supporters claim it will boost innovation and competition.

The AI moratorium is part of Section 43201 of the OBBBA, a wide-ranging budget reconciliation bill that covers taxes, immigration, and healthcare. The House of Representatives narrowly approved the bill with a 215-214 vote, but its fate in the Senate remains uncertain. If enacted, the moratorium would suspend over 60 existing state laws addressing AI, including those targeting algorithmic discrimination and government AI use. Additionally, hundreds of pending AI-related bills could be impacted, raising concerns about the scope of the regulation pause.

The AI Moratorium: Details and Implications

The AI moratorium directs the Commerce Department to modernize federal IT systems using commercial AI technologies, aiming to improve operational efficiency, service delivery, and cybersecurity. However, the provision explicitly bars states from enforcing any AI-related laws or regulations during the 10-year period. This includes laws governing AI models, systems, and automated decision-making processes.

Critics warn that the broad definition of ‘automated decision systems’ in the bill could extend beyond AI, potentially pausing regulations on other computing systems. This could affect laws protecting consumers from deepfakes, hiring discrimination, and other AI-driven harms. States like Tennessee and Missouri have already expressed concerns about losing the ability to address local AI-related challenges.

Support for the AI Moratorium

Republican lawmakers, tech companies, and business groups like the US Chamber of Commerce have voiced support for the AI moratorium. They argue that a temporary pause on state-level AI regulation would foster innovation, allowing US companies to compete more effectively with Chinese rivals in the AI space. OpenAI, the creator of ChatGPT, has endorsed the measure, emphasizing the need for a unified federal approach to AI regulation.

Proponents also suggest that the moratorium would address the current patchwork of state AI laws, giving Congress time to develop comprehensive federal legislation. Sam Altman, CEO of OpenAI, told a Senate committee that complying with 50 different state regulations would be impractical for the tech industry. Instead, he advocated for a single federal framework that balances innovation with oversight.

Opposition and Constitutional Concerns

Democrats, some Republicans, and civil society organizations have strongly opposed the AI moratorium. They argue that pausing state AI laws could leave consumers, especially vulnerable communities and children, exposed to risks such as algorithmic bias, privacy violations, and AI-driven scams. Critics also claim that the moratorium’s broad language could undermine existing protections against deepfakes and automated hiring discrimination.

Constitutional concerns have also been raised. An open letter signed by state lawmakers and AI experts, including Gary Marcus, argued that the moratorium might violate the Tenth Amendment, which reserves powers not granted to the federal government for the states. Senator Josh Hawley (R-MO) echoed this sentiment, stating that states should have the freedom to implement AI regulations tailored to their needs.

The debate extends to the tech industry itself. While some leaders, like Scale AI CEO Alexandr Wang, support a unified federal standard, others have expressed reservations. Dario Amodei, CEO of Anthropic, compared the moratorium to ‘removing the steering wheel from a car for 10 years,’ warning that it could hinder responsible AI development.

Uncertain Future in the Senate

The OBBBA now faces scrutiny in the US Senate, where Democrats and some Republicans may challenge the AI moratorium’s inclusion under the Byrd Rule, which prohibits extraneous provisions in budget bills. The moratorium’s fate remains uncertain, as lawmakers weigh the potential benefits of streamlined AI regulation against the risks of pausing state-level protections.

Beyond the AI moratorium, the OBBBA includes other controversial measures, such as phasing out green energy tax credits and allocating funds for border security technologies. The bill’s broad scope and divisive provisions ensure that it will remain a focal point of political debate in the coming months.