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A controversial provision in President Trump’s fiscal year 2025 budget proposal, known as the ´One Big Beautiful Bill Act,´ is drawing heavy criticism from state attorneys general and civil society organizations. The measure, which passed out of committee and is slated for a potential House vote, would place a 10-year moratorium on state enforcement of any law or regulation governing artificial intelligence models, systems, or automated decision-making tools. This sweeping federal preemption would effectively nullify new and existing state laws addressing Artificial Intelligence oversight, according to a bipartisan letter signed by 40 state attorneys general and over 140 advocacy and labor organizations.
Section 43201(c) of the 1,116-page bill specifies only narrow exceptions: states could enact measures that remove legal obstacles or streamline Artificial Intelligence operations, but any substantive restrictions or mandates relating to Artificial Intelligence models would be rendered unenforceable until at least 2035. State leaders are warning that this provision would handcuff states’ ability to respond to emerging harms and consumer protection issues posed by Artificial Intelligence technologies. Their letter to Congressional leaders warns that hundreds of state-level bills and laws—including those recently adopted in 31 states, Puerto Rico, and the US Virgin Islands—would be overridden, depriving consumers of current rights and limiting avenues for redress if harm arises from the unchecked use of Artificial Intelligence.
Civil groups such as Mozilla, the Distributed AI Research Institute, EPIC, and a range of teacher, labor, and policy organizations echoed these concerns, arguing that Washington’s inaction on comprehensive Artificial Intelligence regulation has left the states as the last line of defense for the public. These organizations fear that the moratorium would shield companies from accountability even in cases of deliberate design flaws or foreseeable harm, uprooting existing consumer protections at the state level. Despite these warnings, efforts to build momentum for federal Artificial Intelligence regulation have repeatedly stalled in Congress; even a proposal to create a regulatory commission has failed in committee. The future of Trump’s bill remains uncertain, with House Republicans divided and the bill’s path to passage unclear. Trump has urged for its approval before Memorial Day, but both House and Senate obstacles remain.
