Congress is in a mad dash to push through Trump’s so-called “Big Beautiful Bill,” with a particularly contentious AI moratorium provision causing headaches. Initially, this provision called for a decade-long halt on state AI regulations. But here’s what this really means: it’s a political tug-of-war between federal and state control, with a hefty dose of lobbying from Big Tech thrown in.
White House AI czar David Sacks backs the moratorium, but it’s facing backlash from an eclectic mix of lawmakers. You’ve got everyone from state attorneys general to staunch conservatives like Marjorie Taylor Greene raising hell. A revised version knocked the pause down to five years with exceptions, but the backlash didn’t stop. Critics are calling it a “get-out-of-jail-free card” for tech giants. And frankly, they’re not wrong. We’ve seen this circus before—big promises, little protection.
Senator Marsha Blackburn initially opposed the moratorium but then did a 180, collaborating with Senator Ted Cruz on a compromised version. She’s now backpedaling again, citing concerns about Big Tech exploiting kids and creators. Sounds like she’s finally realizing that the carve-outs in the bill are more smoke than fire. Until there’s solid federal legislation like the Kids Online Safety Act, she argues states need the freedom to protect their residents.
Blackburn’s flip-flopping isn’t new. She’s always been a proponent of music industry protections in Tennessee, a state with a vested interest in safeguarding its artists against things like AI-generated deepfakes. The exemption in her proposal for such laws shows she wants to cover her bases, but the broader provision is still too vague to be effective.
Despite the exemptions, opposition remains strong. Labor unions and figures like Steve Bannon are skeptical, warning that the bill’s language might let tech companies run amok for five years before anyone can rein them in. The opposition isn’t just hot air. Critics like Senator Maria Cantwell see the provision as a legal shield for tech companies, effectively stalling any meaningful regulation under the guise of preventing “undue burden” on AI systems.
Advocacy groups are sounding the alarm too. They argue the moratorium could gut state efforts to regulate tech safety, thanks to its cleverly crafted language. Public Citizen, a consumer rights group, calls it a Trojan horse, stripping state protections under the guise of moderation. And they’re right to be wary. The past is littered with examples of legislation that promised checks on industry power but delivered little.
Senators Cantwell and Ed Markey have entered the fray with an amendment to eliminate the moratorium altogether. They see it for what it is: a wolf in sheep’s clothing. Their concern is that the bill ties federal broadband funds to compliance with the moratorium, effectively strong-arming states into submission. It’s a classic federal overreach masquerading as progress.
In a twist of political theater, Blackburn is now backing an amendment with Cantwell to strip the moratorium from the bill entirely. It’s a late-game pivot that reeks of damage control. The Trump Administration is pushing Congress to vote before the July 4th break, but with all this back-and-forth, it’s clear that the bill’s AI provisions are more of a political football than a serious regulatory effort.
Bottom line: this isn’t the first time we’ve seen tech regulation get bogged down in legislative gridlock, and it won’t be the last. Investors and policymakers alike need to keep their eyes peeled for real, effective legislation—not just platitudes and political posturing.
