States Regain AI Regulatory Power as Senate Rejects Ban

States across the U.S. have regained their power to regulate artificial intelligence, following an overwhelming Senate vote to remove a 10-year federal moratorium from President Trump’s comprehensive tax and spending bill. The 99-1 decision on Tuesday marks a significant win for localized control over emerging technologies.
Republican Senator Marsha Blackburn led the charge for the successful amendment, introduced during a protracted “vote-a-rama” session. Her efforts underscore a clear legislative intent to allow states to address the nuanced impacts of AI within their jurisdictions, particularly where federal guidelines are absent or insufficient.
Initially, the Senate’s of the bill would have only indirectly restricted states, by making those with AI regulations ineligible for a new $500 million fund for AI infrastructure. The outright removal of the ban, however, grants states full and unfettered authority to legislate on AI, without any federal financial or regulatory impediments.
Despite the preferences of major AI companies like Google and OpenAI for a unified federal regulatory approach to minimize innovation hurdles, Senator Blackburn argued for the immediate necessity of state-level safeguards. She underscored that “Until Congress passes federally preemptive legislation like the Kids Online Safety Act and an online privacy framework, we can’t block states from making laws that protect their citizens.”