Illustration: Lindsey Bailey/Axios
Congress is notoriously slow at passing technology legislation, and state action may be hampered now too.
Why it matters: While Congress has hesitated, states have picked up the slack.
- Now that states are actively regulating on what both parties are viewing as the most important emerging technology, Congress wants to stop them in their tracks.
How it works: The state AI provision tucked into the House reconciliation package would prohibit enforcement of state AI laws for 10 years, making it a fruitless exercise to pass any more in the near future.
The big picture: The provision underscores how much the conversation around AI has shifted under the Trump administration.
- Safety, once paramount, is pushed completely aside as Congress makes it clear that not standing in industry's way is the top priority — even as lawmakers struggle to pass their own provisions.
- In OpenAI CEO Sam Altman's latest testimony, he emphasized the importance of clear federal rules and said it's onerous for the industry to have to operate under different rules in different states.
- That message was received by a much more sympathetic Congress than it would have been when Altman first came to Capitol Hill in 2023 and begged for regulation.
State of play: One GOP staffer said the AI provision has a solid chance of passing in the Senate because few senators have come out against it and they have bigger priorities for the reconciliation bill, such as getting savings from Medicaid.
- The staffer also said they were feeling confident the Byrd Rule in the Senate — which prevents extraneous provisions from being included in the budget bill — may not ultimately kill the provision.
By the numbers: In 2025, 48 states, along with Puerto Rico, introduced AI-related bills, and 26 states enacted more than 75 AI-related measures, per a roundup from the National Council of State Legislatures.
- The state laws cover AI deepfakes, ownership and copyright, whistleblower protections, algorithmic transparency and more.
- Many states are copying one another's laws. Colorado's AI Act passed in February has served as a model for several other state efforts.
The other side: Hundreds of groups have pushed back against the state law moratorium, along with members of the Senate who have advocated for strong federal AI laws.
- Nonprofit and civil society groups have called the provision "a giveaway to Big Tech."
- Sens. Josh Hawley and Marsha Blackburn also have said they had reservations about the state AI law ban.
The bottom line: States learned they have to take matters into their own hands on a range of tech issues after years of Congress failing to pass a basic federal privacy law.
- Now, instead of trying to pass preemptive AI legislation, Congress is focused on grinding state action to a halt.
