Big tech loses as Senate backs state-level regulation of AI

by Emily Birnbaum, Oma Seddiq and Steven T. Dennis 

The Senate killed a controversial effort to prevent US states from regulating artificial intelligence, delivering a win for critics of the biggest tech companies after a compromise proposal collapsed.  

Senators voted 99-1 early Tuesday to strip the language out of President Donald Trump’s signature tax legislation during a marathon session that began Monday and continued through the night. The overwhelming opposition came despite widespread support for the pause on state AI legislation from Trump administration officials and GOP allies in Silicon Valley.  

Tennessee Senator Marsha Blackburn, who led the effort to nix the provision, represents music industry power center Nashville. She had raised concerns the measure would block her home state’s ELVIS Act, a law backed by the record industry that prohibits people from using AI to mimic a musicians’ voices. 

The state AI legislation freeze would have barred states from passing AI legislation if they received broadband funding from a $500 million broadband funding program. 

Before the vote, Texas Senator Ted Cruz expressed frustration that a compromise he had brokered with Blackburn had collapsed and offered to have a voice vote on her amendment striking the provision, but she insisted on a roll call vote. 

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

Commerce Secretary Howard Lutnick threw his support behind the AI measure as well, calling it imperative for national security.  

Despite the Senate’s move, the tech industry will likely continue to push for curtailing state AI legislation in future federal tech policy efforts.  

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