'Gift-Wrapped Favor to Big Tech': GOP Sneakily Pushes Ban on State AI Regulation

A provision that U.S. House Republicans added to the budget reconciliation bill—unrelated to the GOP's goal of slashing Medicaid access in the legislation—represents, as one journalist said, "one of the most radical positions Republicans have taken" thus far on artificial intelligence and the regulations that experts have demanded in order to ensure the technology is used safely.

U.S. Rep. Brett Guthrie (R-Ky.) added the language Sunday night ahead of a markup session Tuesday, in what appeared to be an effort to stop state governments from enforcing existing and proposed laws to protect the public from AI systems.

"No state or political subdivision thereof may enforce any law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems during the 10-year period beginning on the date of the enactment of this act," reads the provision.

With Congress "captured by Big Tech," said America 2.0 publisher and editor Dave Troy, "states are the only ones who can even try to regulate AI in the U.S."—but that would change under Guthrie's proposed ban.

"Now that state laws are finally starting to hold AI companies accountable for deepfake child pornography, election disinformation, AI companions targeting minors, and algorithmic abuse, Congress wants to slam the brakes?"

Under the law, state governments could be barred from using federal funds to develop oversight for AI or support any initiatives that differ from the Trump administration's stance on AI, which was on display earlier this year when President Donald Trump issued an order revoking the Biden administration's executive action to ensure the "safe, secure, and trustworthy development" of the technology.

Laws like one passed in New York in 2021 mandating bias audits for AI tools used in hiring decisions; a law in California requiring healthcare providers to disclose their use of generative AI; and another California measure that would require AI developers to document the data they use to create trainings—which could crack down on AI firms that hide their use of copyrighted material—could all be rendered unenforceable by Guthrie's proposal.

At 404 Media, Emanuel Maiberg wrote that "the AI industry has been sucking up to Trump since before he got into office," with tech mogul Elon Musk leading the so-called Department of Government Efficiency, Silicon Valley investor David Sacks appointed "AI czar," and OpenAI CEO Sam Altman appearing with Trump in January as he unveiled an AI data center development plan.

The inclusion of the AI provision in the budget reconciliation bill could limit debate on the proposal.

The House Committee on Energy and Commerce, which is chaired by Guthrie, held a full committee markup of the bill, including the AI language, on Tuesday. Rep. Jan Schakowsky (D-Ill.), who sits on the panel and is the ranking member of the Commerce, Manufacturing, and Trade Subcommittee, called the provision "a giant gift to Big Tech."

"This ban will allow AI companies to ignore consumer privacy protections, let deepfakes spread, and allow companies to profile and deceive consumers using AI," said Schakowsky.

The Tech Oversight Project called on Democratic lawmakers to "stand firm" against the "AI poison-pill spending bill."

Allowing the "unhinged, dangerous" measure to pass, said Public Citizen's Big Tech accountability advocate, JB Branch, would be "an outrageous abdication of congressional responsibility and a gift-wrapped favor to Big Tech that leaves consumers vulnerable to exploitation and abuse."

"States across the country, red and blue alike, have taken bold, bipartisan action to protect their citizens," said Branch. "Now that state laws are finally starting to hold AI companies accountable for deepfake child pornography, election disinformation, AI companions targeting minors, and algorithmic abuse, Congress wants to slam the brakes? This isn't leadership, it is surrendering to corporate overreach and abuse under the guise of 'protecting American innovation.'"

In the 2025 legislative session, lawmakers in at least 45 states and Puerto Rico have introduced at least 550 AI-related bills. In at least eight states proposals have focused on regulating high-risk AI systems and preventing discrimination by algorithms, and at least 19 state legislatures are considering legislation to stop corporate landlords from fixing rental prices via algorithm.

"Congress must ask itself: Will it stand with Big Tech lobbyists, or with the people it was elected to represent?" said Branch. "Because millions of constituents across the country are currently protected by state laws that would be gutted under this proposal. Public Citizen urges lawmakers to strike this reckless preemption language from the reconciliation bill and commit to advancing federal AI legislation that builds on, not bulldozes, state-level progress."