Update: As of July 1, the provision banning states from regulating artificial intelligence has been removed from H.B. 1, also known as the “One, Big, Beautiful Bill.”
President Donald Trump’s sweeping tax and spending bill — known as the “One, Big, Beautiful Bill” Act — officially passed the U.S. House of Representatives in May 2025. While the legislation primarily revolves around tax cuts and federal program reductions, a last-minute clause aiming to ban state-level regulations of artificial intelligence has placed the AI industry in the spotlight and sparked some fierce backlash.
In June, the Senate released its own amended version of the provision, in which Senate Republicans say that states wishing to access $500 million in federal BEAD funding cannot enforce any law “limiting, restricting or otherwise regulating artificial intelligence models, artificial intelligence systems or automated decision systems entered into interstate commerce.”
In other words, any state wishing to receive federal broadband expansion funds through fiscal year 2030 must submit to this five-year “temporary pause” to state-enforced AI regulation. The rewritten provision has survived the scrutiny of Senate Parliamentarian Elizabeth MacDonough, who ruled that it doesn’t violate the Byrd rule, according to reporting from The Hill. The Byrd rule aims to make sure bills undergoing reconciliation, such as the “One, Big, Beautiful Bill,” don’t include provisions considered extraneous to the federal budget reconciliation processes. While the AI regulation ban in the House’s version of the bill was not tied to federal funding, the Senate’s version has changed that.
Though the bill still faces a razor-thin margin in the Senate, its passage in the House marks a major step toward becoming federal law — and has intensified concerns that it could severely weaken AI oversight in the United States, exposing consumers to increased privacy, safety and discrimination risks.
How Does Trump’s One, Big, Beautiful Bill Affect AI?
The One, Big, Beautiful Bill contains a clause that effectively bans all U.S. states from regulating artificial intelligence for up to 10 years. Although this could speed up AI development, it could also leave the United States without any AI laws, potentially exposing consumers to various dangers and violations.
First, What Is the Big, Beautiful Bill?
The One, Big, Beautiful Bill was originally written as a 1,116-page bill that includes a wide range of Republican legislative priorities: individual and corporate tax cuts, stricter food assistance requirements, reduced Medicaid funding and increased spending for deportation operations. But the tech industry is most focused on a last-minute addition by the House Energy and Commerce Committee that specifically targets AI regulation, stating:
“No State or political subdivision thereof may enforce any law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems during the 10-year period beginning on the date of the enactment of this Act.”
Essentially, this would have banned all states from implementing AI regulations for the first 10 years of the bill’s existence, raising concerns about the future of AI development and usage in the United States.
The Senate’s version of the bill includes a five-year “temporary pause” on state regulation of AI for any state that accepts federal Broadband Equity, Access, and Development, or BEAD, project funding. These funds have historically gone toward expanding access to high-speed internet across the United States
What Does the Big, Beautiful Bill Mean for AI Regulation?
If Trump’s Big, Beautiful Bill is approved by the Senate, all U.S. states that accept federal BEAD funding from enforcing any laws related to artificial intelligence through fiscal year 2030. Supporters argue the move could accelerate innovation, but critics warn it would leave the country without any enforceable AI regulations at all. Either way, the bill would have lasting consequences for both the AI industry and everyday consumers.
Absence of AI Regulations
To date, there are no federal U.S. laws or regulations governing artificial intelligence. President Joe Biden did create an AI Bill of Rights during his term, but it merely serves as a set of suggestions for guiding the responsible use of AI. It isn’t an enforceable law that individual creators or organizations need to follow. Biden also signed an executive order establishing some safety standards for AI development and use in 2023, but Trump has since gotten rid of that.
This is crucial because Trump’s proposed bill calls for the end of state AI regulations, but it doesn’t lay the groundwork for any kind of law or regulatory framework on a local, state or federal level. Without any official government oversight of AI, the U.S. risks falling far behind its peers like the European Union in ensuring AI is used ethically and responsibly.
Advantages for Big Tech
AI leaders like Sam Altman have pushed for looser regulations, including the right to use copyrighted material to train AI models. It’s no surprise that Trump agrees, considering his track record on AI regulation. Among other things, he has introduced tariffs to encourage the stateside production of AI hardware, opened the door for AI models to be trained on government data and emphasized U.S. AI innovation through the Stargate Project.
At the same time, Trump’s cuts to scientific research limit access to AI technology in academic settings. So, if the Big, Beautiful Bill becomes law, it would likely favor commercial AI development and further entrench the dominance of major tech companies that already hold most of the industry’s resources. Top AI businesses would thrive, while wider development of AI would fall by the wayside.
Fewer Safeguards for Consumers
The removal of all U.S. state laws around AI would make it much easier for companies to produce and use AI for dubious purposes. For example, legislation in various U.S. states establishes rules around using AI for situations like hiring for open roles, making housing decisions, providing mental health services and accessing personal data. All of these protections would be put on hold for 10 years under the Big, Beautiful Bill, and the lack of any regulatory replacement would leave consumers in an extremely vulnerable position.
What Has the Response Been to the Big, Beautiful Bill?
Despite advancing out of the U.S. House, Trump’s Big, Beautiful Bill still faces stiff opposition before it can become law.
Republican Resistance
The bill was barely approved by the House Budget Committee, with conservatives calling for additional changes. On one hand, fiscal conservatives want deeper cuts to programs like green energy and Medicaid to further reduce federal spending. On the other hand, moderate Republicans are against rolling back Medicaid spending.
This is on top of the usual procedures that can slow down the reconciliation process — the effort to reduce the federal budget deficit by decreasing or increasing spending in different areas. For example, senators can use the Byrd rule to remove content deemed “extraneous” from a bill. The late addition of the clause on AI regulation could have been categorized as irrelevant to the main parts of Trump’s bill, making it susceptible to being struck down under the Byrd rule since it wasn’t initially connected to any budgetary elements. But it looks as though the the Senate version of the bill, which seems to tie the ban on AI regulation to state-level BEAD funding, has successfully circumvented the “Byrd bath.”
Georgia Republican Representative Marjorie Taylor Greene made her own opposition to the provision public on June 3, over a week after she voted to pass the bill through the House on May 21. In a post on X, Greene said she plans to vote against the bill if it comes back to from the Senate with the provision in tact, complicating the House GOP’s plan to pass the legislation with its razor-thin majority.
Tennessee Senator Marsha Blackburn, a Republican holdout who opposed the 10-year regulation ban, struck a deal with Senate Commerce Chair Ted Cruz, according to reporting from The Hill. Blackburn has been a key proponent of the Kids Online Safety Act and her state passed the ELVIS Act last year. The current version of the provision allows states to enforce child safety laws, prevent deceptive acts and protect individuals’ identity and likeness.
State-Level Pushback
There has also been criticism on the state-level, specifically directed toward the bill’s clause on AI regulation. A bipartisan group of state attorneys general signed a letter to members of Congress urging them to reject the bill’s language around AI. They reference examples of state laws protecting consumers from the potential harms of AI, blast the bill for not suggesting a replacement framework and stress the necessity of state AI regulations in the absence of decisive Congressional action.
Tennessee Attorney General Jonathan Skrmetti, one of the co-leads of the letter, offered his own warning in a separate statement.
“AI has incredible potential but amplifies every risk we’ve seen from Big Tech and creates new risks we don’t fully understand,” Skrmetti said. “Eliminating state oversight through this reconciliation amendment guarantees Americans will suffer repeated violations of their privacy, consumer protection, and antitrust laws.”
Advocacy Groups Opposing the Ban
On May 21, a coalition of more than 70 advocacy groups published an open letter to congressional leadership opposing the provision to ban state-level AI regulation. Members of the coalition include Encode, Fairplay, Common Sense Media and Young People’s Alliance in addition to many others working to protect online spaces for children and teens.
“By wiping out all existing and future state AI laws without putting new federal protections in place, AI companies would get exactly what they want: no rules, no accountability, and total control. As organizations working on the frontline of the consequences of AI development with no guardrails, we know what this would mean for our children,” the letter says.
Frequently Asked Questions
What is the Big, Beautiful Bill?
The Big, Beautiful Bill promotes President Trump’s legislative priorities, such as providing business tax cuts, rolling back Medicaid spending and directing resources to deportation efforts. A last-minute section on artificial intelligence was added to the bill, calling for a ban on all AI regulations established by U.S. states. In the current version of the bill, states can regulate AI if they choose not to accept BEAD funding for the next five years.
What does the Big, Beautiful Bill mean for AI?
The Big, Beautiful Bill initially proposed a five-year “temporary pause” on all U.S. AI regulations for states that accept federal BEAD funding. However, that provision has since been removed, so the bill no longer has any direct impact on AI regulation.
