The battle over who should regulate artificial intelligence has reached a critical juncture as federal and state authorities clash over jurisdiction and approach.
On June 6, 2025, the Senate introduced its version of President Trump's 'One Big Beautiful Bill,' which would impose a decade-long moratorium on state and local AI regulations in exchange for federal broadband funding. This controversial provision has sparked significant debate, with critics arguing it undermines state-level consumer protections already in development.
"The concerns for residents and the environment seem to be overshadowed by the power and influence that these developers have," said one state official opposing the federal moratorium. With the Senate version now in play, the fate of AI regulation could be determined in the coming weeks as both chambers work to reconcile their differences.
The timing is particularly significant as states have been rapidly advancing their own AI governance frameworks. Just days earlier, on June 2, the Texas legislature passed the comprehensive Texas Responsible AI Governance Act, which would take effect in January 2026 if signed by the governor. This would make Texas the fourth state after Colorado, Utah, and California to enact AI-specific legislation.
State lawmakers across the country have introduced hundreds of AI-related bills in 2025, focusing on consumer protection, chatbot regulation, generative AI transparency, and frontier model safety. Colorado's AI Act has become a model for many states, requiring developers to mitigate algorithmic discrimination and deployers to conduct risk assessments for high-risk AI systems.
The federal proposal threatens to upend this state-level momentum at a time when AI systems are becoming increasingly integrated into daily life. Privacy experts note that 2025 has already seen significant developments in AI governance, with the EU's AI Act setting global standards for transparency, bias detection, and human oversight in high-risk AI systems.
As virtual assistants and chatbots become more sophisticated, concerns about data privacy have intensified. Recent studies show that only 27% of organizations review all AI-generated content before use, highlighting the urgent need for robust oversight. The clash between federal deregulation and state-level protections will likely define the future of AI governance in America.