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US Senate Rejects Proposed State-Level AI Regulation Ban

The initial provision would have barred states from accessing a new $500 million AI infrastructure fund.

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Written by: CDO Magazine Bureau

Updated 1:29 PM UTC, Wed July 9, 2025

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U.S. senators overwhelmingly rejected a proposal that would have blocked states from regulating artificial intelligence (AI). In a 99-1 vote last week, the Senate removed a provision from former President Donald Trump’s sweeping tax-cut bill that sought to impose a 10-year ban on state-level AI regulation. 

The move clears the way for states to craft their own AI rules amid growing concerns over the technology’s impact.The Senate later passed the overall tax bill by a narrow 51-50 margin. The initial provision would have barred states from accessing a new $500 million AI infrastructure fund if they chose to regulate AI independently.

Top Democrats and several Republican governors applauded the vote, citing the importance of protecting consumers and addressing AI-related harms like deepfakes and child safety. 

“This 99-1 vote sent a clear message that Congress will not sell out our kids and local communities in order to pad the pockets of Big Tech billionaires. I am proud to have partnered with Ranking Member Cantwell and Senator Blackburn on an amendment to strip this dangerous language, and I look forward to working with my colleagues to develop responsible guardrails for AI,” Senator Markey said in a statement.

The amendment reflects growing bipartisan concern about ceding too much regulatory power over AI to the federal government without clear national standards.

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