House Republicans include a 10-year ban on U.S. states regulating AI in 'big, beautiful' bill

U.S. House Republicans surprised tech industry watchers and outraged state governments when they added a clause to Republicans' signature "big, beautiful" tax bill that would ban states and localities from regulating artificial intelligence for a decade.

The brief but consequential provision, tucked into the House Energy and Commerce Committee's sweeping markup, would be a major boon to the AI industry, which has lobbied for uniform and light touch regulation as tech firms develop a technology they promise will transform society.

However, while the clause would be far-reaching if enacted, it faces long odds in the U.S. Senate, where procedural rules may doom its inclusion in the GOP legislation.

"I don't know whether it will pass the Byrd Rule," said Sen. John Cornyn, R-Texas, referring to a provision that requires that all parts of a budget reconciliation bill, like the GOP plan, focus mainly on the budgetary matters rather than general policy aims.

"That sounds to me like a policy change. I'm not going to speculate what the parliamentarian is going to do but I think it is unlikely to make it," Cornyn said.

Senators in both parties have expressed an interest in AI and believe that Congress should take the lead in regulating the technology. But while lawmakers have introduced scores of bills, including some bipartisan efforts, that would impact AI, few have seen any meaningful advancement in the deeply divided Congress.

Half of all U.S. states so far have enacted legislation regulating AI deepfakes in political campaigns, according to a tracker from the watchdog organization Public Citizen.

California state Sen. Scott Wiener called the Republican proposal "truly gross" in a social media post.

"Congress is incapable of meaningful AI regulation to protect the public. It is, however, quite capable of failing to act while also banning states from acting," Wiener wrote.

A bipartisan group of dozens of state attorneys general also sent a letter to Congress on Friday opposing the bill.

"AI brings real promise, but also real danger, and South Carolina has been doing the hard work to protect our citizens," said South Carolina Attorney General Alan Wilson, a Republican, in a statement. "Now, instead of stepping up with real solutions, Congress wants to tie our hands and push a one-size-fits-all mandate from Washington without a clear direction. That's not leadership, that's federal overreach."