Republicans scrap deal in ‘big, beautiful bill’ to lower restrictions on states’ AI regulations

A deal that had been reached between Sens. Marsha Blackburn, R-Tenn., and Ted Cruz, R-Texas, over how states can regulate artificial intelligence has been pulled from President Donald Trump’s “big, beautiful” bill.

The collapsed agreement would have required states seeking to access hundreds of millions of dollars in AI infrastructure funding in the “big, beautiful” bill to refrain from adopting new regulations on the technology for five years, a compromise down from the original 10 years.

It also included carveouts to regulate child sexual abuse material, unauthorized use of a person’s likeness and other deceptive practices.

Blackburn announced Monday night that she is withdrawing her support for the agreement.

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“For as long as I’ve been in Congress, I’ve worked alongside federal and state legislators, parents seeking to protect their kids online, and the creative community in Tennessee to fight back against Big Tech’s exploitation by passing legislation to govern the virtual space,” Blackburn said in a statement to Fox News.

“While I appreciate Chairman Cruz’s efforts to find acceptable language that allows states to protect their citizens from the abuses of AI, the current language is not acceptable to those who need these protections the most,” she continued. “This provision could allow Big Tech to continue to exploit kids, creators, and conservatives.”

Blackburn added: “Until Congress passes federally preemptive legislation like the Kids Online Safety Act and an online privacy framework, we can’t block states from making laws that protect their citizens.”

When asked about Blackburn pulling her support for the compromise, Cruz told Punchbowl News the “night is young.”

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But Blackburn appears to now be co-sponsoring an amendment with Sen. Maria Cantwell, D-Wash., that would completely pull the AI moratorium from the bill.

Cantwell had earlier said that the since-scrapped deal between Blackburn and Cruz would do “nothing to protect kids or consumers.”

“It’s just another giveaway to tech companies,” Cantwell said in a statement Monday. “This provision gives AI and social media a brand-new shield against litigation and state regulation. This is Section 230 on steroids.”

Blackburn is one of several Republicans who have expressed concerns about the 10-year ban on state AI regulation.

Last week, 17 Republican governors wrote a joint letter to Senate Majority Leader John Thune, R-S.D., and House Speaker Mike Johnson, R-La., calling for the pause to be scrapped completely.

“AI is already deeply entrenched in American industry and society; people will be at risk until basic rules ensuring safety and fairness can go into effect,” the letter reads. “Over the next decade, this novel technology will be used throughout our society, for harm and good. It will significantly alter our industries, jobs, and ways of life, and rebuild how we as a people function in profound and fundamental ways.”

“That Congress is burying a provision that will strip the right of any state to regulate this technology in any way – without a thoughtful public debate – is the antithesis of what our Founders envisioned,” it continued.

Some House Republicans also said they do not support the AI provision, including Rep. Marjorie Taylor Greene, who admitted she found out about it a few days after voting for Trump’s spending bill.

“Full transparency, I did not know about this,” Greene wrote on X. “I am adamantly OPPOSED to this and it is a violation of state rights and I would have voted NO if I had known this was in there.”