Republicans Pander to Big Tech With Proposed 10-Year Ban on State AI Regulations

Over the weekend, Republicans in the House unveiled a sweeping budget proposal that includes massive cuts to Medicaid, food assistance, climate programs, and more. But buried amongst those cuts, legislators also proposed a decade-long ban on AI regulations at the state level. Although framed as upholding innovation, the attempted moratorium is yet another clear display of the federal government pandering to the desires of Big Tech.

Within the House Energy and Commerce Committee’s bill, lawmakers proposed that “no state or political subdivision may enforce any law of regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems” starting from the day that the proposal is enacted.

Laws imposing “a substantive design, performance, data-handling, documentation, civil liability, taxation, fee, or other requirement” on listed AI systems would fall under the moratorium. However, there are a few exceptions, like if the above requirements are due to federal regulation or if the law also applies to non-AI systems that “provide comparable functions”. In addition, the pause isn’t applicable to regulations that “remove legal impediments” or “facilitate the deployment or operation of” AI systems.

The proposal comes shortly after the Commerce Committee’s hearing titled “Winning the AI Race”. During his testimony, OpenAI CEO Sam Altman said that allowing states to assemble a patchwork regulatory framework “will slow us down at a time where I don’t think it’s in anyone’s interest.” And sure, abiding by regulations in 50 different states is hard. But a) that’s how the U.S. works, each state can have its own unique laws, and b) there wouldn’t be such an amalgamation of AI regulation if the federal government actually put together its own.

Regardless of which party holds power, the U.S. is notorious for falling behind when it comes to tech-related legislation. One of the biggest examples is the U.S.’s lack of its own comprehensive federal privacy law. As a result, states have no choice but to enact piecemeal legislation to tackle a rapidly changing environment as new technologies usher in their own unique concerns. Per the National Conference of State Legislatures, at least 45 states, Puerto Rico, the Virgin Islands, and Washington, D.C., introduced AI bills.

On Monday, Rep. Jan Schakowsky (D-Illinois), a ranking member of the Commerce, Manufacturing, and Trade Subcommittee, blasted the proposal as a “giant gift to Big Tech” and “shows that Republicans care more about profits than people.” Similarly, the Tech Oversight Project’s executive director, Sacha Haworth, told the Hill that the “so-called ‘states’ rights'” party’s provision “is not only hypocritical, it’s a massive handout to Big Tech.” Haworth added that “it comes as no surprise that Big Tech is trying to stop [efforts to regulate AI] dead in its tracks.”

Since taking office, Trump has taken a clear stance on letting AI run wild. In January, he rescinded Biden’s executive order for AI regulation and, shortly after, directed the Office of Management and Budget to overhaul its directive on federal uses of AI. Although Trump released his own AI guidance last month that copies Biden’s in a few areas, his administration has overall played fast and loose with AI, with no concern for analyzing its civil rights impacts.

During his opening statement at last week’s meeting, Sen. Ted Cruz (R-Texas) summarized the dominant attitude towards AI regulations, stating, “All of this busybody bureaucracy – whether Biden’s industrial policy on chip exports or industry and regulator-approved ‘guidance’ documents – is a wolf in sheep’s clothing. To lead in AI, the U.S. cannot allow regulation, even the supposedly benign kind, to choke innovation or adoption.”

Currently, the proposed moratorium’s full scope is unclear. David Stauss, an attorney with Husch Blackwell, told the International Association of Privacy Professionals, “A lot would depend on how the terms are defined.” Legally speaking, AI is a nebulous term. Stauss noted that while Colorado’s AI Act uses a broad definition based on the Organisation for Economic Co-operation and Development’s own, other states are more limited. But if federal legislator’s definition is broad, Stauss said, “all sorts of laws could be implicated, even product liability and medical malpractice laws as extreme edge cases.”

It’s entirely possible that this proposal gets removed down the road. If it stays, its language will likely be adjusted one way or the other. But its very inclusion in House Republicans’ budget bill suggests that the U.S. will continue hurtling down the AI-or-be-damned pathway with no regard for the consequences.