In the fast-paced maneuvering ahead of a vote on the administration’s major legislative proposal, Congress appears to have dismissed the concept of a 10-year pause on state-level AI regulation.

On Tuesday, the Senate voted to remove this clause from what has been dubbed the “One Big, Beautiful Bill.” The vote was decisive—reportedly 99-1—in an overnight session just days before the anticipated full vote on the bill.

Tech Industry Perspectives

Some voices within the tech sector had supported maintaining the ban, arguing that dealing with varying state regulations would be burdensome for companies. Sam Altman from OpenAI, among others, voiced concerns about such a fragmented system.

“(These kinds of state laws) will slow us down at a time where I don't think it's in anyone's interest for us to slow down," Altman reportedly stated, advocating for a streamlined federal approach that is “l(fā)ight touch.”

Nonetheless, Senator Marsha Blackburn of Tennessee appeared to play a key role in pushing to eliminate the provision, citing the risk that neither states nor the federal government would regulate AI if the moratorium remained.

"While I appreciate Chairman Cruz's efforts to find acceptable language that allows states to protect their citizens from the abuses of AI, the current language is not acceptable to those who need these protections the most," Blackburn said in a statement explaining her rejection of Cruz’s temporary compromise prior to removing the clause altogether. "This provision could allow Big Tech to continue to exploit kids, creators, and conservatives."

The Infrastructure Fund

Another important detail regarding how the bill evolved during its passage through Congress involves the $500 million infrastructure fund.

The version of the AI regulation moratorium that was ultimately rejected by the Senate had already been adjusted to apply only in relation to this funding pool. In other words, it wasn’t a total regulatory freeze but rather a condition tied to financial support.

As previously noted, Blackburn justified her stance based on child safety and the protection of personal data for entertainers.

But there are broader reasons to scrutinize the industry and work toward making AI safer overall.

It's worth noting that while few tech leaders publicly advocated for regulation recently, not long ago figures like Elon Musk were emphasizing the importance of researching AI ethics and establishing societal guidelines for AI.

That still seems relevant as new technologies emerge rapidly.

From that perspective, rejecting the moratorium gives all 50 states more flexibility—to act in the public interest, refine systems, and focus on AI safety and fairness.

State-Level Actions

So, what are states currently considering?

A significant amount of activity is underway.

“State lawmakers are evaluating a wide range of AI legislation, with hundreds of bills introduced in 2025,” note contributors to Inside Privacy, a blog run by Covington & Burling LLP. “As detailed in this post, many of these proposals fall into several core categories.”

They include:

• comprehensive consumer protection laws
• industry-specific rules on automated decision-making
• chatbot oversight
• generative AI transparency mandates
• energy usage requirements for AI data centers
• advanced model safety laws

“Although these categories reflect only a portion of ongoing AI legislative efforts,” the authors add, “they highlight the top priorities of state legislatures and point to upcoming AI laws that may soon take effect.”

Additional insights can be found at the Council of State Governments.

Expect much more of this to unfold in the near future. It may be complicated and challenging to navigate, but most would agree it's a path worth taking.

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