Key Points:

1. On July 4, 2025, the Big Beautiful Bill was signed by the President and became law—but there was no 10-year AI regulation moratorium for States

   
   

2. The Senators engaged in a lengthy Vote-a-Rama regarding the bill and the 10-year moratorium in particular, and it was decided that the provision was to be removed

   
   

3. This means that US businesses are going to have to be on the lookout for any new AI laws that provide guardrails in the name of AI safety and responsible AI—and comply

Following several amendments made at the last minute in an early morning Vote-a-Rama on July 4, 2025, US HR 1, the One Big Beautiful Bill Act was signed by President Trump and became Public Law No: 119-21. This was a highly controversial and lengthy bill; the focus of this article is on the proposed 10-year AI regulation moratorium that would have been imposed on States.

As we can see from the history of the bill in the House, the bill passed on May 22, 2025 by one vote—Yeas and Nays were 215–214. The House said “yea” to the bill—including the 10-year moratorium. Subsequently, the bill went to the Senate, where there were several debates and amendments made between June 27 and July 3, 2025. Finally, on July 4, 2025, the bill was signed by the President and became law. But there was no 10-year AI regulation moratorium in the final version of the bill. The White House website had a page suggesting that the bill was backed by American industry and had several corporate logos of the supporting companies running across the page.

What was this bill about?

On a high level, this was primarily a budget bill, where a number of measures would be used to transfer wealth from low-income taxpayers to rich taxpayers. For example, it would make the Trump 2017 tax cuts permanent. Those who opposed the bill coined the bill as the “Big Ugly Bill” and asserted that the bill stole from the poor to give to the ultra-rich. The result seems to be that 16 million people would lose their health insurance, there would be the largest cuts to nutrition assistance in history, and higher education would become less affordable. Worse, the changes would add $3 trillion to the national debt.

Although the bill was supposed to be a budget bill, we can see in the large amount of text contained in the bill that much more was covered: agriculture, nutrition and forestry; Armed Forces; banking, housing, and urban affairs; commerce, science, and transportation; energy and natural resources; environment and public works; finance; health, education, labor, and pensions; homeland security and governmental affairs; and the judiciary. That is, it was a bill that would cram many topics into one bill.

Only a small part of the initial version of the bill dealt with AI regulation by States, the focus of this article.

What was the 10-year AI regulation moratorium about?

Essentially, we can see in a previous version of the bill that there was a moratorium proposed, where no State or political subdivision thereof would be able to enforce, during a 10-year period, any law or regulation of that State or a political subdivision thereof limiting, restricting, or otherwise regulating artificial intelligence models, artificial intelligence systems, or automated decision systems entered into interstate commerce.

An exception was that the rule could not be used to prohibit the enforcement of any law or regulation that:

• had a primary purpose and effect of removing legal impediments to, or facilitating the deployment or operation of, an artificial intelligence model, artificial intelligence system, or automated decision system; or streamlining licensing, permitting, routing, zoning, procurement, or reporting procedures in a manner that facilitates the adoption of artificial intelligence models, artificial intelligence systems, or automated decision systems

  
  

• did not impose any substantive design, performance, data-handling, documentation, civil liability, taxation, fee, or other requirement on artificial intelligence models, artificial intelligence systems, or automated decision systems unless such requirement is imposed under Federal law; or in the case of a requirement imposed under a generally applicable law, is imposed in the same manner on models and systems, other than artificial intelligence models, artificial intelligence systems, and automated decision systems, that provide comparable functions to artificial intelligence models, artificial intelligence systems, or automated decision systems, and

  
  

• did not impose a fee or bond unless such fee or bond was reasonable and cost-based; and under such fee or bond, artificial intelligence models, artificial intelligence systems, and automated decision systems were treated in the same manner as other models and systems that perform comparable functions or

  
  

• any provision of a law or regulation to the extent that the violation of such provision carried a criminal penalty

Why did the moratorium die in the Senate?

In an overnight session, the Senators decided to reject the 10-year moratorium on State-level AI regulation, voting 99–1 to remove the provision. To be sure, there were likely many disappointed tech companies like OpenAI or Google who lobbied to keep the provision in the bill to protect innovation, to no avail.

The 10-year moratorium almost became a five-year moratorium. There was talk about what could constitute exceptions—many Senators wanted to push some kind of carving out (for instance, protecting children or creatives). But in the end, it became clear that there would be too much confusion created with the addition of any exceptions that would allow for AI protections for children online and musicians in the music industry. And some Senators pointed out that any moratorium, even for five years, would leave us with no AI protections and create a clear path to challenge any State law in court—it was troubling that the tech companies would have to comply with virtually no regulation. Others were concerned that any moratorium would be endangering a State’s rights to govern in its jurisdiction.

Many were pleased that the vote turned out as it did—some Senators stated that the vote sent a clear message to Big Tech that Congress would not sell out kids and local communities in order to pad the pockets of Big Tech billionaires. The bipartisan opposition to the moratorium also signalled that there would be no Big Tech power grab.

So for several reasons, the 10-year moratorium died.

What can we take from this development?

We can say goodbye to the 10-year moratorium on State-level AI regulation. This means that States are still free to enact and enforce State laws pertaining to AI models, AI systems, or automated decision systems, without the federal government coming in and preventing it from taking place.

It also means that US businesses are going to have to be on the lookout for any new AI laws that provide guardrails in the name of AI safety and responsible AI. To be clear, it means that there will be legal consequences in cases where companies do not comply with the law.

The area of AI regulation is growing, and it may increase rapidly now that this recent Senate Vote-a-Rama has taken place. As you may recall, some States are further ahead than others legislatively speaking. To that end, we recommend that businesses prepare for upcoming laws and remain in compliance.