Senate Republicans revise ban on state AI regulations in bid to preserve controversial provision

Key Points

• Senate Republicans revised their party’s tax-overhaul provision to block states from imposing AI regulations for 10 years by conditioning federal broadband funding on compliance, a change aimed at meeting budget reconciliation rules.
• The proposed moratorium, originally an outright ban in the House bill, has sparked anger among state lawmakers and digital safety advocates, while AI industry leaders like OpenAI’s Sam Altman argue it’s needed to prevent a regulatory “patchwork.”
• Some Republicans, including Rep. Marjorie Taylor Greene, have opposed the moratorium, arguing it expands federal power at the expense of state authority.
• The Republican tax package also seeks to expand commercial spectrum auctions and extends Trump-era tax cuts alongside new breaks and cuts to social programs, with a Senate vote expected later this month.

WASHINGTON (AP) — Senate Republicans have made changes to their party's sweeping tax bill in hopes of preserving a new policy that would prevent states from regulating artificial intelligence for a decade.

In legislative text unveiled Thursday night, Senate Republicans proposed denying states federal funding for broadband projects if they regulate AI. That's a change from a provision in the House-passed version of the tax overhaul that simply banned any current or future AI regulations by the states for 10 years.

“These provisions fulfill the mandate given to President Trump and Congressional Republicans by the voters: to unleash America’s full economic potential and keep her safe from enemies,” Sen. Ted Cruz, chairman of the Senate Commerce Committee, said in a statement announcing the changes.

The proposed ban has angered state lawmakers in Democratic and Republican-led states and alarmed some digital safety advocates concerned about how AI will develop as the technology rapidly advances. But leading AI executives, including OpenAI's Sam Altman, have made the case to senators that a “patchwork” of state AI regulations would cripple innovation.

Some House Republicans are also uneasy with the provision. Rep. Marjorie Taylor Greene, R-Ga., came out against the AI regulatory moratorium in the House bill after voting for it. She said she had not read that section of the bill.

“We should be reducing federal power and preserving state power. Not the other way around,” Greene wrote on social media.

Senate Republicans made their change in an attempt to follow the special process being used to pass the tax bill with a simple majority vote. To comply with those rules, any provision needs to deal primarily with the federal budget and not government policy. Republican leaders argue, essentially, that by setting conditions for states to receive certain federal appropriations — in this instance, funding for broadband internet infrastructure — they would meet the Senate's standard for using a majority vote.

Cruz told reporters Thursday that he will make his case next week to Senate parliamentarian on why the revised ban satisfies the rules. The parliamentarian is the chamber's advisor on its proper rules and procedures. While the parliamentarian's ruling are not binding, senators of both parties have adhered to their findings in the past.

Senators generally argue that Congress should take the lead on regulating AI but so far the two parties have been unable to broker a deal that is acceptable to Republicans’ and Democrats’ divergent concerns.

The GOP legislation also includes significant changes to how the federal government auctions commercial spectrum ranges. Those new provisions expand the range of spectrum available for commercial use, an issue that has divided lawmakers over how to balance questions of national security alongside providing telecommunications firms access to more frequencies for commercial wireless use.

Senators are aiming to pass the tax package, which extends the 2017 rate cuts and other breaks from President Donald Trump's first term along with new tax breaks and steep cuts to social programs, later this month.