Washington, D.C. — A ten-year prohibition on state laws governing artificial intelligence is embedded in the latest iteration of a sweeping budget proposal championed by Senate Republicans. This moratorium raises alarms among various lawmakers and civil advocacy organizations, who are concerned about the potential implications for consumer protections.
Supporters of the provision assert that it will prevent AI companies from being overwhelmed by a patchwork of state regulations. However, critics warn that, if enacted, this measure could exempt major technology firms from essential state-level legal protections for an extended period, all while failing to establish comprehensive federal guidelines to fill any regulatory gaps.
Rep. Ro Khanna, D-Calif., whose district encompasses Silicon Valley, expressed his apprehensions regarding the far-reaching nature of the proposed moratorium. He emphasized that the measure could undermine state-level efforts to regulate social media, prevent algorithmic discrimination in housing, and limit misleading AI-generated content. “This would give corporations unchecked freedom to develop AI without considering the welfare of consumers and workers,” he said.
The ambiguity of the moratorium’s provisions has drawn scrutiny from experts. Jonathan Walter, a senior policy advisor at the Leadership Conference on Civil and Human Rights, noted that the language surrounding automated decision-making is excessively broad, making it difficult to determine which state laws could be impacted. He remarked, “It seems clear that the reach of this moratorium extends beyond just artificial intelligence.”
These concerns extend to specific state initiatives as well, such as regulations requiring accuracy and independent testing for technologies like facial recognition in states such as Colorado and Washington. An analysis from the nonprofit organization Americans for Responsible Innovation indicated that existing laws, such as New York’s legislation aimed at protecting children from addictive social media practices, could be unintentionally nullified by this moratorium.
As proposed by the Senate, the provision has evolved. It now ties state broadband infrastructure funding to compliance with the ten-year ban, extending its scope to cover criminal laws as well—a departure from the House’s language.
While proponents of the moratorium argue its impact is overstated, others, such as J.B. Branch from Public Citizen, contend that any competent attorney for a technology firm would interpret it as applicable. “This language opens the door for Big Tech to exploit the lack of clear state oversight,” he said.
Khanna believes some lawmakers may not fully grasp the extent of what the moratorium entails. He cited the reaction of Rep. Marjorie Taylor Greene, R-Ga., a close ally of former President Trump, who recently stated she would have opposed the bill had she known about the moratorium’s inclusion.
California’s SB 1047 has emerged as a focal point in this debate. The bill aimed to impose safeguards on large AI models but was vetoed by Governor Gavin Newsom under pressure from influential tech entities. Companies like OpenAI, despite their previous calls for regulation, have pivoted toward eliminating rules they perceive as impediments to competition, particularly in relation to global rivals.
Khanna acknowledged that some state regulations may be flawed, but insisted that the solution lies in crafting effective federal regulations, not stifling state-level innovation. He cautioned against binding states from proactively safeguarding their residents, calling the moratorium “reckless” in the context of rapid advancements in AI technology.
In anticipation of the Senate’s decision, Khanna and over fifty of his Democratic colleagues from California urged leaders to eliminate the AI provision, branding it as a threat to American safety across sectors such as healthcare, education, and housing. They further warned that the sweeping definition of AI encompassed any form of computer processing, making it alarmingly vague.
Additionally, more than 250 state lawmakers from across the nation have rallied to contest the proposal. They argue that effectively managing AI technology necessitates agile responses from state and local governments, which are often more attuned to the needs of their communities compared to federal agencies. They stress that restricting legislative discussions at the state level would stifle essential policy innovation during a time when it is crucial to establish best practices for AI governance.
Khanna concluded by underscoring the significant implications of failing to regulate AI, comparing it to past issues like net neutrality. “This isn’t just about internet structure; it will affect jobs, the role of algorithms on social media, and the quality of life for so many,” he said. “In this landscape, accountability to public interests becomes even more essential.”
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