The fight over who should regulate artificial intelligence in America reached a critical juncture on Wednesday as Senate Republican and Democratic leaders clashed over a controversial provision in President Donald Trump's sweeping budget legislation.
At the heart of the debate is a proposed 10-year federal moratorium that would prevent states from regulating AI systems. The provision has been rewritten by Senate Commerce Chair Ted Cruz to tie compliance with the ban to billions in federal broadband funding through the $42 billion Broadband Equity, Access, and Deployment (BEAD) program.
Teamsters President Sean O'Brien, who spoke at the 2024 Republican National Convention, entered the fray Wednesday with a strongly worded letter urging Congress to scrap the proposal. "Pure and simple, it is a giveaway to Big Tech companies who reap economic value by continuing to operate in an unregulated void where their decisions and behavior are accountable to no one," O'Brien wrote, raising specific concerns about worker surveillance and self-driving vehicles.
Major AI companies including Google and OpenAI have backed the moratorium, arguing that a patchwork of differing state requirements would stifle innovation. Commerce Secretary Howard Lutnick voiced support on social media, saying the measure would end "the chaos of 50 different state laws" and ensure American companies can develop cutting-edge technology "without interference from anti-innovation politicians."
However, opposition has mounted from an unusual coalition including state attorneys general from both parties, civil liberties groups, and even some Senate Republicans. Senator Maria Cantwell, the senior Democrat on the commerce committee, argued the measure forces states to "choose between protecting consumers and expanding critical broadband infrastructure to rural communities."
The stakes are particularly high given the rapid pace of AI development. In 2025 alone, state lawmakers filed more than 1,000 AI-related bills, with 28 states enacting at least 75 new measures. Critics warn that a decade-long regulatory pause would leave consumers unprotected from emerging AI harms that may not even be apparent yet.
As the Senate prepares for crucial votes this week, the provision's fate remains uncertain, with its outcome likely to shape the regulatory landscape for AI development in America for years to come.