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Cruz Proposes AI ‘Sandbox’ Bill to Ease Federal Rules

By  |  September 10, 2025

Republican Senator Ted Cruz on Wednesday unveiled new legislation aimed at loosening regulatory restrictions for artificial intelligence firms, according to Reuters. The proposal would allow AI companies to apply for temporary exemptions from certain federal rules, giving them the flexibility to test and develop emerging technologies under a so-called “regulatory sandbox.”

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    Cruz, who chairs the Senate Commerce Committee, introduced the measure ahead of a subcommittee hearing focused on reducing barriers for the technology sector as it competes with China. During the hearing, Cruz emphasized that the legislation does not amount to a blanket waiver. “A regulatory sandbox is not a free pass. People creating or using AI still have to follow the same laws as everyone else,” he said, per Reuters.

    If enacted, the bill would permit federal agencies overseeing regulations to consider exemption applications from AI firms for two years at a time. Companies would be required to outline potential financial and safety risks, as well as plans to mitigate them, according to Reuters.

    Read more: The Case for Commodification: AI Agents

    The proposal has sparked pushback from consumer advocacy groups. Public Citizen warned that provisions granting the White House’s Office of Science and Technology Policy authority to overrule agency decisions could put Americans at risk. The group argued the bill effectively treats citizens as “test subjects.” J.B. Branch, Public Citizen’s Big Tech accountability advocate, criticized the legislation, saying, “The sob stories of AI companies being ‘held back’ by regulation are simply not true and the record company valuations show it.”

    Notably, the bill omits a prohibition on state-level regulation—an element that technology lobbyists have pushed for and the White House has said would spur innovation. A prior attempt to enact such a ban, included in a broader Trump-era spending measure, was overwhelmingly rejected in the Senate with a 99-1 vote in July, Reuters reported.

    During the hearing, Michael Kratsios, Director of the White House Office of Science and Technology Policy, urged lawmakers to revisit the matter, telling Cruz, “It’s something that my office wants to work very closely with you on.”

    Source: Reuters