U.S. House Republicans have ignited debate with a controversial addition to their proposed tax legislation: a 10-year ban preventing states and local governments from regulating artificial intelligence (AI). The provision, part of a broader markup by the House Energy and Commerce Committee, has drawn sharp criticism from state officials and advocates of tech accountability.
Tech industry groups have long pushed for federal oversight to avoid a patchwork of state laws, arguing uniform rules would foster innovation. However, critics warn the clause could stifle efforts to address AI risks, such as deepfakes in elections. Over half of U.S. states have already enacted laws targeting AI misuse in political campaigns, according to watchdog group Public Citizen.
California State Sen. Scott Wiener condemned the move, stating on social media: "Congress is incapable of meaningful AI regulation… yet it wants to ban states from acting." A bipartisan coalition of state attorneys general also opposed the bill, with South Carolina AG Alan Wilson (R) calling it "federal overreach."
Despite its House backing, the provision faces hurdles in the Senate. Sen. John Cornyn (R-Texas) noted it may violate budget reconciliation rules, which require legislation to focus on fiscal matters. With bipartisan Senate interest in AI regulation growing, the clause’s future remains uncertain.
As Congress struggles to advance AI legislation, the debate highlights tensions between federal preemption and state-led innovation—a dynamic global businesses and policymakers are watching closely.
