Lawmakers Push Back Against Federal Limits on State AI Rules
In a major decision this week, the U.S. Senate voted 99–1 to remove a proposed 10-year ban on state-level artificial intelligence (AI) regulations. The amendment was stripped from President Donald Trump’s latest tax and spending bill during a late-night session on Tuesday, July 1.
This vote marks a strong rejection of Big Tech’s efforts to avoid state-by-state AI rules, and a big win for those who want more oversight and public accountability around how AI is developed and used.
Why the Ban Was Proposed
Supporters of the proposed moratorium — mostly Republican lawmakers aligned with tech interests — argued that AI innovation could be slowed down by inconsistent state rules. They warned that a patchwork of state laws could create confusion and make it harder for companies to scale AI tools across the country.
Sen. John Thune (R-S.D.), the Senate Majority Leader, had earlier stated:
“We want to be the leaders in AI and quantum and all these new technologies… The way to do that is not to come in with a heavy hand of government; it’s to come in with a light touch.”
In simple terms, the goal was to keep AI regulations under federal control only, blocking states from passing their own rules for a decade.
A Bipartisan Rejection
However, most lawmakers — including many Republicans — strongly opposed this idea. They believed the moratorium would strip states of the ability to protect their citizens from harmful or dangerous uses of AI.
Sen. Josh Hawley (R-Mo.) was one of the most vocal critics of the ban. He called it:
“Terrible policy… a huge giveaway to some of the worst corporate actors out there.”
The final vote of 99–1 shows overwhelming bipartisan agreement that states should retain the power to regulate AI when needed.
Civil Society Speaks Out
Civil rights groups, academics, artists, and tech workers had also spoken out against the proposed 10-year ban. In a public letter to the U.S. House of Representatives, they warned that the moratorium would leave communities unprotected from harmful AI systems.
Their statement read:
“This moratorium would mean that even if a company deliberately designs an algorithm that causes foreseeable harm… the company making that bad tech would be unaccountable to lawmakers and the public.”
They emphasized that without strong oversight, biases, discrimination, and other serious risks could go unchecked.
Big Tech’s Loss
The Senate’s decision is a blow to major tech companies who wanted a clear, nationwide set of rules rather than having to comply with 50 different state laws.
But critics say Big Tech’s real motive is to avoid tougher restrictions. Some states, like California and Illinois, have already taken bold steps to regulate how AI is used in hiring, surveillance, and more.
Now, with the federal ban gone, states are free to move forward with their own AI regulations.
Related News: Growing Doubts About Agentic AI
While lawmakers debate policy, another issue is emerging in the AI world — agentic AI.
This type of AI can take actions and complete tasks without human supervision. It’s seen as a next-level version of current AI tools like ChatGPT, which only respond to human prompts.
However, according to a recent PYMNTS Intelligence report, most businesses are still skeptical about its use.
👉 Even though nearly all CFOs at large companies have heard of agentic AI,
👉 Only 15% are actually thinking about using it in the near future.
The report highlights that agentic AI is still in the trial phase. While some firms are testing its potential, wide-scale adoption remains slow due to ethical and security concerns.
Generative AI Still Leading the Way
Instead of agentic AI, most companies are sticking with generative AI tools — like ChatGPT — that help with content creation, customer service, and data analysis.
These tools are less autonomous, meaning they still rely on human prompts and control. Businesses feel safer using them for now, while the future of agentic AI remains uncertain.
A Win for Public Oversight
The Senate’s vote sends a strong message: AI regulation should not be off-limits to states. As artificial intelligence becomes more powerful and widespread, lawmakers believe both federal and state governments need the ability to step in and protect public interests.
With Big Tech’s preferred ban now off the table, expect more states to begin crafting their own AI rules and protections in the months ahead.
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