AI regulation battle has reignited tensions in Congress after a major compromise was dropped from a key federal bill. A previously negotiated deal between Sens. Marsha Blackburn of Tennessee and Ted Cruz of Texas is now off the table. The proposal would have prevented states from creating new AI regulations for five years in exchange for access to federal infrastructure funds. The restriction was originally ten years but had been reduced. Still, opposition remained strong.
The proposal also allowed states to continue regulating AI in certain cases. These exceptions included child sexual abuse material, deepfakes, and other deceptive digital practices. On Monday, Blackburn withdrew her support. In a statement, she emphasized her long-standing work with parents and lawmakers to protect kids and creators online. “I appreciate Chairman Cruz’s efforts,” she said, “but the current language is unacceptable to those who need these protections most.”
She warned that the provision would let Big Tech exploit vulnerable groups. Without strong federal protections, she argued, states must be allowed to pass their own laws. Blackburn is now co-sponsoring a new amendment with Sen. Maria Cantwell of Washington. That amendment would fully remove the five-year moratorium from the bill.
Cantwell has fiercely opposed the original deal. She called it “a giveaway to tech companies” and warned it would leave consumers and children unprotected. “It shields AI and social media from lawsuits and regulations.” Sen. Cruz remained optimistic, telling reporters, “The night is young.”
However, many Republicans joined the AI regulation debate. Last week, 17 GOP governors sent a letter urging Congress to reject the pause on AI oversight. They expressed concern over the bill’s impact. “AI is already shaping our society,” the letter read. “We need guardrails now not in five or ten years.”
Overall, they argued that blocking state regulation would undermine democracy. States must retain their rights to address emerging technology risks. Even some House Republicans expressed outrage. Rep. Marjorie Taylor Greene said she hadn’t known about the provision before voting. “I would have voted NO if I had known,” she wrote on X. “This violates state rights.”
As the AI regulation debate heats up, lawmakers face increasing pressure to balance innovation with accountability.
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