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Senate Reaches Compromise on State AI Law Moratorium to Advance Big Beautiful Bill

By  |  June 30, 2025

As the Senate works to pass the Big Beautiful budget reconciliation bill before the July 4th recess, two key senators reached a compromise on the state AI law moratorium that threatened to derail the legislation. Sen. Ted Cruz (R-TX), the author of the moratorium provision, and Sen. Marsha Blackburn (R-TN), its most vocal opponent, announced the agreement over the weekend.

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    Under the amended language, the moratorium would be shortened from 10 years to five. It also now includes exemptions for state laws focused on child online safety, child sexual abuse material, and protecting individuals’ name, image, voice, and likeness, so long as they do not impose an “undue or disproportionate” burden on AI systems.

    “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,” Blackburn said in a statement.

    Tennessee was the first state to enact legislation protecting performers against AI impersonation. The ELVIS (Ensuring Likeness Voice and Image Security) Act, passed in March 2024, updated the state’s existing right-of-publicity law, adding AI-specific protections and including a ban on AI-generated voice impersonations.

    Blackburn’s opposition to the original draft of the moratorium could have cost Republicans a crucial vote on President Trump’s signature legislative priority in the closely divided Senate. Two other Republicans, Sens. Thom Tillis (NC) and Rand Paul (KY) voted against the bill in a procedural motion on Saturday and indicated they may vote “no” when it comes to a final vote on the floor. With a narrow, 3-vote majority, losing another vote could be fatal.

    Related: Moratorium On State AI Regulations Clears Key Procedural Hurdle in Senate

    Tillis announced on Sunday that he will not seek reelection next year after Trump sharply criticized him for opposing the bill and threatened to back a primary challenger if he ran again.

    On Friday, a group of 17 Republican governors sent a letter or Senate Majority Leader John Thune (R-SD) opposing the 10-year moratorium claiming it “threatens to undo all the work states have done to protect our citizens from the misuse of artificial intelligence,” Politico reported. The governors’ opposition further highlighted the growing internal division within the GOP over the ban, adding to the urgency to find a compromise.

    Should the Republicans manage to drag the bill over the finish line it would still need to go back to the House for final approval, where Republicans hold an even slimmer majority. The House passed its version of the bill in May, but the Senate version has significant differences. To meet Trump’s July 4th deadline for signing the bill, House Speaker Mike Johnson (R-LA) would likely need to bring the Senate version directly to the floor for an up-or-down vote.

    Johnson has been a staunch supporter of the 10-year moratorium in the House bill and would need to drop his support to adopt the Senate’s 5-year compromise.