US Senate Removes AI Regulation Ban from Trump Tax-Spending Bill

Web Editor

July 1, 2025

a large white building with a flag on top of it's roof and a flagpole in the background, Anne Rigney

Background on the AI Regulation Ban and its Removal

The United States Senate, led by Republicans, voted overwhelmingly on Tuesday to remove a federal 10-year moratorium on state regulation of artificial intelligence (AI) from the broad tax-cutting and spending bill of President Donald Trump.

The Vote

Senators voted 99-1 to eliminate the prohibition from the legislation bill by adopting an amendment presented by Republican Senator Marsha Blackburn. This action took place during a marathon session known as “vote-a-rama,” where lawmakers offered numerous amendments in hopes of ultimately passing Republican-backed measures.

Key Players and Their Stances

Senator Thom Tillis was the only legislator who voted to maintain the prohibition.

The Senate version of Trump’s legislation would have only restricted states that regulate AI from accessing a new $500 million fund to support AI infrastructure.

Support from Major AI Companies

Leading AI companies, such as Google (Alphabet) and OpenAI, have expressed their support for Congress removing AI regulation from the hands of states to foster innovation free from various requirements.

Amendment Details

Blackburn presented her amendment to suppress the provision a day after agreeing on a compromise text with Senate Commerce Committee President Ted Cruz. The compromise would have reduced the ban to five years and allowed states to regulate issues like artist voice protection or online child safety, provided they did not impose an “undue or disproportionate burden” on AI.

However, Blackburn withdrew her support before the amendment vote.

Rationale Behind Removing the Ban

“The current language is unacceptable for those who most need these protections,” Blackburn said in a statement.

“Until Congress passes preventive federal legislation like the Online Child Protection Act and an online privacy framework, we cannot prevent states from enacting laws to protect their citizens.”

Impact on AI Regulation and Innovation

The removal of the AI regulation ban from the Trump tax-spending bill signifies a significant shift in how states approach AI regulation. Previously, the 10-year moratorium had kept states from implementing AI-specific laws. Now, with this ban lifted, states are free to regulate AI as they see fit.

This change is expected to have a substantial impact on AI innovation, as major tech companies like Google and OpenAI have advocated for a more permissive regulatory environment. By removing state-level AI regulations, these companies hope to foster an ecosystem where AI can thrive without excessive compliance burdens.

Key Questions and Answers

  • What was the federal moratorium on state AI regulation? The moratorium was a 10-year ban that prevented states from implementing their own AI-specific laws.
  • Who proposed the amendment to remove the ban? Republican Senator Marsha Blackburn presented the amendment.
  • How did other senators react to the proposed compromise? Although Blackburn initially supported a five-year reduction in the ban, she withdrew her backing before the amendment vote.
  • What are the potential consequences of removing the AI regulation ban? The move is expected to accelerate AI innovation by reducing compliance burdens on tech companies, although it may also raise concerns about consumer protection and privacy.