The U.S. Senate dealt Silicon Valley’s regulatory hopes a devastating blow Tuesday morning, voting 99-1 to remove a contentious AI provision from President Trump’s enormous tax and spending bill. The landslide defeat followed weeks of intense opposition by governors, state officials, and bipartisan interest groups.
The bill, originally drafted as a 10-year ban on states legislating over AI, had itself become increasingly contentious. Lawmakers eventually tied it to federal funding, meaning only states that agreed to back off AI regulations would receive subsidies for broadband internet or AI infrastructure. The move was seen by critics as holding essential infrastructure hostage to protect tech companies from oversight.
Blackburn-Cantwell Amendment Derails Cruz’s AI Ban
The vote capped off a dramatic series of political maneuvers that stretched into the early morning hours. Republican Senator Ted Cruz of Texas, who chairs the Senate Commerce Committee and championed the original proposal, had been scrambling to save his pet project through the weekend.
Cruz thought he had found salvation when he struck a compromise deal that would have shortened the ban from 10 years to five and carved out exceptions for certain favored laws, including protections for children and Tennessee’s ELVIS Act, which prevents AI from replicating artists’ voices without permission.
The compromise seemed promising until Senator Marsha Blackburn of Tennessee pulled a stunning reversal. Despite initially working with Cruz on the deal, Blackburn teamed up with Democratic Senator Maria Cantwell of Washington on Monday evening to introduce an amendment that would kill the entire provision.
“It is frustrating that Congress has been unable to legislate on emerging technology,” Blackburn said on the Senate floor. “But you know who has passed it? It is our states. They’re the ones that are protecting children in the virtual space.”
AI Bill Fails Amidst State Opposition and Tragic Testimonies
The battle lines had been clearly drawn for weeks. On one side stood prominent tech leaders who argued that a patchwork of state regulations would cripple AI innovation and hurt America’s ability to compete with China. OpenAI CEO Sam Altman had told Cruz earlier this year that “it is very difficult to imagine us figuring out how to comply with 50 different sets of regulations.”
But opposition was far more intense and multifaceted than tech supporters anticipated. Republican governors, spearheaded by Arkansas’s Sarah Huckabee Sanders, signed a letter to Congress opposing the bill. Sanders, Trump’s first-term White House press secretary, credited Blackburn for “leading the charge” to protect states’ rights.
“This is a monumental win for Republican Governors, President Trump’s one, big beautiful bill, and the American people,” Sanders wrote on social media after the vote.
Perhaps most compelling was the opposition from parents who have lost children to online harms. Florida mother Megan Garcia, who is suing the maker of an AI chatbot she says pushed her 14-year-old son to suicide, wrote a powerful letter to lawmakers last week.
“A moratorium gives companies free rein to create and launch products that sexually groom children and encourage suicide, as in the case of my dear boy,” Garcia wrote. Her story and others like it added human faces to what might otherwise have been an abstract policy debate.
Cruz’s Artificial Intelligence Compromise Crumbles Amidst Late-Night Vote
As his compromise crumbled, Cruz lashed out at various opponents, blaming everyone from China to California Governor Gavin Newsom to “transgender groups and radical left-wing groups who want to use blue state regulations to mandate woke AI.” Notably absent from his blame list were the numerous Republican state officials who also opposed the measure.
Even Trump had reportedly supported Cruz’s last-ditch compromise. “When I spoke to President Trump last night, he said it was a terrific agreement,” Cruz said. But it wasn’t enough to save the provision.
The vote was made at 4 a.m. in a late-night session, with Republican leaders working to round up support for the overall tax package while fending off other amendments. In the end, even Cruz voted to strip out his own proposition, with only North Carolina Senator Thom Tillis refusing to give in.
The decisive defeat is an unmistakable message that states will still have the authority to regulate AI however they please, setting up what promises to be a messy patchwork of laws that the tech community will have to navigate.
