Key US senators strike deal to pause state AI laws for 5 years

The US Senate is poised to approve a controversial provision preventing some states from regulating artificial intelligence (AI), marking a victory for the tech companies, venture capital firms and start-ups that backed it. 

The language, which is part of US President Donald Trump’s signature tax legislation, had drawn opposition from a handful of Republican senators who derided the provision as a giveaway to the biggest tech companies.

But the top Republican holdout, Tennessee Senator Marsha Blackburn, agreed late on June 28 to a deal with Texas Senator Ted Cruz, who has led the effort. 

The new provision prevents states from regulating AI for the next five years, as opposed to the 10-year pause in Cruz’s initial language. States would be barred from enforcing AI laws only should they receive some portion of $500 million (S$637 million) in new federal funding for a broadband programme, according to Republicans.

The new language also explicitly carves out state AI laws impacting children’s online safety and certain copyright issues.

Ms Blackburn represents the music-industry power centre Nashville. She had raised concerns the Cruz provision would block her home state’s Elvis (Ensuring Likeness Voice and Image Security) Act, which prohibits people from using AI to mimic musicians’ voices without their consent. The new provision would explicitly exempt the Elvis Act, which centres on how to handle musicians’ names, images and likenesses. 

“To ensure we do not decimate the progress states like Tennessee have made to stand in the gap, I am pleased chairman Cruz has agreed to update the AI provision to exempt state laws that protect kids, creators and other vulnerable individuals from the unintended consequences of AI,” Ms Blackburn said in a statement. 

The measure was a top priority for tech companies including Microsoft and Meta Platforms, as well as venture capital firms like Andreessen Horowitz, which backed smaller but still powerful players. Trump allies in Silicon Valley, including venture capitalist Marc Andreessen, defence tech firm Anduril founder Palmer Luckey and Palantir co-founder Joe Lonsdale, advocated for including the provision. 

Commerce Secretary Howard Lutnick threw his support behind the measure as well, calling it imperative for national security. Behind the scenes, White House tech advisers David Sacks and Michael Kratsios supported the pause.  

The ban faced an uphill battle in the Senate, where opposition from a handful of members was enough to kill its prospects. But Ms Blackburn’s compromise likely means it will pass the Senate. It is unclear whether the updated provision will have support in the House.

States across the country have enacted dozens of laws aimed at protecting Americans against risks posed by AI, such as unauthorised deepfakes, copyright violations and algorithmic discrimination. The US Congress has yet to pass sweeping regulations on AI. BLOOMBERG