US Senate Nears Five-Year Ban on State AI Laws Linked to Funding

The U.S. Senate is poised to pass a provision, largely driven by Senator Ted Cruz and supported by notable tech figures and companies, that would block states from enforcing their own AI regulations for five years if they accept funding from a new $500 million broadband expansion program. Initially proposed as a 10-year ban linked to a $42 billion broadband fund, the moratorium was shortened to five years with exemptions for laws protecting children online, addressing child sexual abuse material, and safeguarding artists' rights such as Tennessee's ELVIS Act. Critics, including 17 Republican governors, Democrats, consumer advocates, and the New York State Bar Association, argue that this federal preemption would hinder states' ability to protect residents from AI harms and limit democratic experimentation in regulation. Commerce Secretary Howard Lutnick and some White House advisors support the compromise, emphasizing the need for unified federal AI rules to maintain U.S. technological competitiveness, especially amid the global race with China. However, concerns remain over the constitutional implications and the potential imbalance created by states having laws that cannot be effectively enforced if they risk losing AI infrastructure funding. The debate highlights tensions between promoting innovation through federal uniformity and preserving state autonomy to address AI-related risks.