State AI Moratorium Dropped From Defense Authorization Bill

The moratorium’s exclusion marks the second time leadership has been forced to strip the provision from a larger bill. The state-law moratorium measure was originally attached to the sweeping One Big Beautiful Bill passed in August, but was stripped out in the face of bipartisan opposition.

The effort to ban state AI regulations may not be quite dead, however. House Majority Lead Steve Scalise (R-LA) told reporters Tuesday that Republican leaders are “looking at other places” to include the provision.

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“We need to find a place to do it,” Scalise said, per The Hill. “[It’s] an important bill, but it’s a bill that you have to build a separate coalition on. And if you can add it, that’s great, but [the NDAA] wasn’t the best place for this to fit. “But we’re still looking at other places because there’s still an interest,” he continued. “You know, you’ve seen the president talk about it.”

Proponents of the measure, including the Trump administration, insist federal preemption is necessary to avoid a patchwork of state regulations that could have the net effect of suppressing investment and putting U.S. innovation at a disadvantage against national AI rivals like China.

Read more: US Sets New Rules for Patents Involving AI

“There’s still an interest in making sure that you don’t have states like California that wreck the ability to innovate in artificial intelligence, similar to what Europe did to wreck their innovation,” Scalise said Tuesday.

“AI is where a lot of new massive investment is going,” he continued. “You’re seeing companies invest in $5 billion, $10 billion, $20 billion, real money. We want that money to be invested in America. And when you see some states starting to put a patchwork of limitations, that’s why it’s come to the federal government’s attention to allow for an open marketplace, so you don’t have limitations that hurt innovation.”

Opponents counter that federal preemption is inappropriate in the absence of a comprehensive national framework for the technology. Although dozens of bills have been introduced in the current Congress that could affect aspects of AI, so far Congress’ efforts have been as piecemeal as the offending patchwork of state laws.

The White House introduced its AI Action Plan in July that features sweeping proposals to eliminate existing regulations affecting AI and AI companies, including a proposal to withhold certain federal funds from states deemed to have “overly burdensome” laws impacting AI.  Its most concrete result so far has been President Trump’s recission of Biden-era executive orders instituting various AI-related safety measures, which Trump could accomplish unilaterally. But a broader rollback of federal regulations would require action by Congress, while efforts to withhold federal funds from states would inevitably trigger litigation, which might drag out the process by months, if not longer.