US budget bill imposes 10-year moratorium on state AI regulations ^↺

House Energy and Commerce Committee chair Brett Guthrie has inserted a clause into the draft Budget Reconciliation bill that would bar states and local governments from “enforcing any law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems” for the next decade.

The language broadly defines AI enough to cover long-standing algorithms and newer generative models. If enacted, existing state measures—such as California’s disclosure rule for AI-generated patient communications, its forthcoming transparency mandate for model-training data, and New York City’s bias-audit requirement for hiring tools—would be unenforceable.

Supporters frame the moratorium as a way to avoid a patchwork of rules that could stifle innovation. Critics see it as a sweeping preemption that shields companies from accountability and overrides popular state-level protections against discrimination and opacity.

The provision aligns with former President Donald Trump’s deregulatory approach to AI. It follows sustained lobbying by prominent tech figures, including Elon Musk and venture capitalist Marc Andreessen, who advise the current administration. The measure must still clear both chambers of Congress, where opposition from Democrats and some state-focused Republicans is likely.

Lobbying behind the moratorium reflects a wider deregulatory drive in Washington. After undoing Biden-era executive orders meant to curb high-risk algorithms, the Trump administration brought influential tech figures—including Elon Musk, former PayPal executive David Sacks, and investor Marc Andreessen—into formal advisory roles. Critics warn that the budget would lock that agenda in for a decade, sweeping away state transparency and bias-audit rules adopted after well-documented failures in hiring, health-care, and credit-scoring systems.