It was never hidden—but it almost slid through anyway.
Buried deep in the Senate version of Trump’s megabill was a 10-year ban on state-level AI regulation. The language threatened to cut off access to a new $500 million federal AI fund for any state daring to pass its own laws. Call it innovation by blackmail.
The tech lobby backed it. Google and OpenAI wanted uniformity. But lawmakers like Rep. Thomas Massie, civil liberties groups, and independent watchdogs sounded the alarm early.
And it worked.
The Senate voted 99–1 to strike the ban, after Sen. Marsha Blackburn withdrew support for a watered-down Cruz compromise and introduced a clean repeal. The only vote to keep the moratorium? Sen. Thom Tillis (R-NC).
“Until Congress passes federally preemptive legislation… we can’t block states from making laws that protect their citizens.” —Blackburn
The bill’s original language would have kneecapped states trying to regulate AI-generated child exploitation, biometric scraping, or voice cloning abuse—long before Congress finalizes any national framework.
This wasn’t about innovation. It was about jurisdictional lockdown.
For now, that lock has been broken. The clause is dead. The bill moves forward without it. But the broader campaign to federalize AI governance—and freeze the states out—is still very much alive.
The states have a window. Whether they use it is the next battle.
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