TL;DR
- Congress may pass a federal AI moratorium preempting state-level AI laws for 10 years.
- The proposal is backed by OpenAI, Marc Andreessen, and Palmer Luckey.
- Critics argue it undermines states’ rights and consumer protections.
- Several Republican and Democratic lawmakers are pushing back.
- The moratorium could impact laws in California, Tennessee, and New York.
GOP Push to Freeze State AI Laws Sparks National Controversy
A controversial federal proposal could ban U.S. states from passing or enforcing artificial intelligence laws for the next 10 years, reshaping the landscape of AI regulation across the country. The initiative—championed by Sen. Ted Cruz (R-TX) and backed by tech leaders like OpenAI’s Sam Altman, Anduril’s Palmer Luckey, and Andreessen Horowitz’s Marc Andreessen—has been tucked into a sprawling GOP-backed “megabill” with a July 4 deadline.
The proposed AI moratorium would override any state or local legislation targeting AI systems, including those focused on deepfakes, algorithmic bias, and consumer protection. Cruz argues that allowing each state to regulate AI individually creates a regulatory “patchwork” that hinders innovation—especially in the face of global AI competition from countries like China.
“The current patchwork approach to regulating AI isn’t working and will continue to worsen,” said Chris Lehane, chief global affairs officer at OpenAI.
States With AI Laws at Risk
| State | Key AI Legislation Impacted |
| California | AB 2013: Requires companies to disclose AI training data |
| Tennessee | ELVIS Act: Protects against AI impersonation of musicians |
| New York | RAISE Act: Mandates safety reports from large AI developers |
| Texas, Indiana, others | Election-related deepfake bans apply in several states |
Bipartisan Resistance Mounts
Although the AI moratorium is a Republican-led measure, opposition spans party lines. Sen. Maria Cantwell (D-WA) argued that the policy forces states to “choose between broadband expansion and consumer protection.” Even some Republicans—Sen. Josh Hawley (R-MO) and Sen. Marsha Blackburn (R-TN)—have voiced concerns, citing an overreach on states’ rights.
Meanwhile, 17 Republican governors have urged Senate leaders to strip the moratorium from the bill entirely. Rep. Marjorie Taylor Greene (R-GA) has threatened to oppose the full budget unless the provision is removed.
OpenAI and Tech Industry Support
Despite the controversy, tech executives remain supportive of the moratorium. Sam Altman, during a live podcast, called state-led AI regulation a “real mess” and questioned whether federal policymakers can regulate the technology quickly enough to keep up with its pace of advancement.
Marc Andreessen and Palmer Luckey have also aligned with the proposal, asserting that halting innovation at the state level could hurt U.S. competitiveness.
Industry Critics Say the Moratorium Sidesteps Accountability
In an op-ed for The New York Times, Anthropic CEO Dario Amodei warned that “a 10-year moratorium is far too blunt an instrument.” Amodei argued that such a law could lead to a vacuum in AI governance, where neither states nor the federal government impose meaningful oversight.
“Without a clear federal plan, this gives us the worst of both worlds—no local protection and no national standard,” Amodei wrote.
Organizations like Public Citizen and Demand Progress have also pointed out that companies regularly comply with state-by-state laws in areas like consumer protection, labor, and environment—and AI should be no different.
What Happens Next?
The Senate is preparing for a heated debate and a vote-a-rama on amendments to the megabill. Among those amendments is one aimed at removing the AI moratorium entirely.
Still, even revised language from Cruz tying the moratorium to $500 million in broadband funding has raised eyebrows. Some argue it could still allow the federal government to revoke already-approved BEAD funds from non-compliant states.
“This is not about tech policy—it’s about silencing state oversight,” said Nathan Calvin, VP of state affairs at Encode.
With public polling showing that 60% of Americans want stricter AI regulation (source), the future of the moratorium remains politically volatile.
