GOP Push to Ban State AI Laws Will Only Help Big Tech

Pointing out right-wing hypocrisy does little to alleviate its toll. Still, one provision tucked into Republicans’ sweeping tax and spending bill is particularly glaring in its ideological inconsistency: a 10-year ban on state AI regulation.

Yes, that means that the party most wont to cry federal overreach is now seeking to directly intervene in state policymaking. Of course, Republicans have always only championed states’ rights when it’s politically expedient to do so. And while GOP backers have said the “One Big Beautiful Bill” would prevent a confusing patchwork of AI laws from taking shape across the country, it still includes some exemptions for state laws that promote AI development. Go figure.

The 1,116-page legislative package — a key conduit for the GOP to enact President Donald Trump’s budget goals — narrowly passed the House with a one-vote margin on May 22. It’s now with the Senate, where some Republican legislators have pledged to rewrite portions of the contentious megabill. As traditional fiscal conservatives wrangle with Trump’s MAGA allies, it will likely be weeks before we see another vote, though lawmakers hope to finalize the bill by the end of July to avoid a debt default.

Much to the tech industry’s delight, the GOP’s budget bill proposes allocating millions of dollars to the Pentagon for AI-powered weapons, as well as $25 million on contracts for AI systems to detect “Medicare fraud.” Republicans also want to allocate $500 million over 10 years to update government systems with AI. In that timespan, new state-level AI regulations would be banned, and the enforcement of dozens of preexisting state regulations would be prohibited as well. These existing rules take aim at widespread concerns like deepfake misinformation, algorithmic rent-setting tools and AI-generated explicit content, particularly of children. If enacted, the proposed AI provision could lead to “unfettered abuse,” a coalition of more than 140 organizations warned in a letter to Congress earlier this month. Additionally, generative AI is associated with decreased cognitive skills, and it’s known to guzzle massive amounts of water, consume a great deal of energy and emit climate-warming greenhouse gases. As the technology rapidly becomes more and more advanced and pervasive, we should not be rolling back the few guardrails that currently exist.

Republicans have claimed that the various state laws should be usurped by a cohesive national policy. While this is a worthwhile goal, no such federal framework exists, and there’s little hope that one will arrive anytime soon. On his first day in office, Trump overturned Joe Biden’s executive order on AI ethics and safety, which set goals for a “whole-of-government” approach to regulating generative AI and addressing its social risks. Issued in October 2023, Biden’s EO outlined eight guiding principles and priorities for AI development, including calling for consumer protections and pushing to safeguard privacy and civil liberties as AI advances. But even Biden’s executive order, as a set of unbinding guidelines, failed to manifest as concrete policy decisions.

Tech watchdogs and policy experts note that, despite decades of advocacy, there is still no national data privacy law. Others point to social media, which evolved and scaled with little government oversight and now proves difficult for lawmakers to rein in. “The arguments in favor of this provision only work if you believe that the federal government will soon pass broad guardrails to protect the public, or that AI will be a completely benign technology developed by companies that need no regulatory constraints,” Brad Carson, president of the AI policy nonprofit Americans for Responsible Innovation, told Government Technology. Earlier this month, a bipartisan group of 40 state attorneys general pushed back against the proposed AI rule, writing in a letter, “Imposing a broad moratorium on all state action, while Congress fails to act in this area, is irresponsible and deprives consumers of reasonable protections.”

In December, the bipartisan House Task Force on Artificial Intelligence released a lengthy report outlining suggestions for promoting AI innovation while protecting against the technology’s harms. During a House budget hearing, the chairman of the task force, Rep. Jay Obernolte (R-California), expressed frustrations that Congress had not moved forward with codifying the report’s recommendations, and he cited congressional inaction as his reason for supporting the Big Beautiful Bill’s AI provision. Obernolte argues that a state moratorium is needed to eliminate the regulatory burden on small tech startups trying to navigate a maze of state laws, while giving Congress time to hammer out a national framework. Experts, however, say the current state laws are hardly as cumbersome as Republicans have made them out to be and largely focus on things like transparency. For instance, California, Illinois and Maryland have enacted legislation requiring businesses to disclose when and how AI systems are being used, and in some cases might require employers to obtain an employee’s consent before using AI to collect their data.

And while Republicans claim that the AI rule is intended to protect small and midsize AI businesses, it’s been Big Tech that’s leading the deregulatory push. During a May 8 Senate hearing, OpenAI CEO Sam Altman called state laws “burdensome” and Microsoft President Brad Smith advocated for limited regulation. (Altman, notably, embraced calls for extensive AI regulation back in 2023, telling Congress that the technology could “cause significant harm to the world.”) In Tech Policy Press article debunking state AI law myths, Kara Williams, a law fellow at the Electronic Privacy Information Center, and Ben Winters, director of AI and privacy at the Consumer Federation of America, point out that big tech companies have repeatedly failed to honor their own promises to self-regulate. Williams and Winters argue that regulation can help innovation, not hinder it, and note that state transparency requirements typically are limited to basic information about when AI is used on a consumer. “If simple disclosures of this nature would be disastrous to any company,” they write, “it perhaps points to a deficiency in the product, not the regulation requiring the disclosures.”

It’s unclear whether the proposed AI rule will make it across the finish line. With the Big Beautiful Bill now in the Senate for consideration, GOP critics have largely focused on fiscal issues like shaving off spending, making certain tax cuts permanent, preventing the debt ceiling from rising, and, in some cases, opposing unpopular cuts to Medicaid and food stamp benefits. Thus far, only two Republican senators, Sen. Marsha Blackburn (R-Tennessee) and Sen. Josh Hawley (R-Missouri), have publicly pushed back against the AI provision. However, it will likely face a steep uphill battle, since a guideline known as the Byrd Rule prevents “extraneous matters” from being included in the budget reconciliation bill.

Ultimately, it’ll be up to the Senate parliamentarian to determine whether a 10-year ban on state AI laws qualifies as a budget-related item or if it must be excised. If the AI regulatory moratorium does end up on the chopping block, some Republicans say that they’ll fight to push it through as a separate piece of legislation. And even before we see the final reconciliation bill, we know it’ll include these things: tax cuts for the rich, more money to the military and police, and fewer benefits for everyone else.