Senate Republicans threaten to cut broadband funds from states that regulate AI

Senate Republicans have revised their proposed 10-year ban on state AI regulations, now threatening to withhold federal broadband funding from states that regulate artificial intelligence instead of imposing an outright prohibition. The change represents an attempt to preserve the controversial provision while complying with Senate budget rules that require tax legislation to primarily address federal spending rather than policy mandates.

What you should know: The revised approach uses federal funding as leverage rather than direct regulatory prohibition to achieve the same outcome.

• The original House version would have banned any current or future AI regulations by states for a decade.
• The Senate version denies states federal broadband infrastructure funding if they choose to regulate AI.
• Senate Republicans argue this funding-based approach meets budget reconciliation requirements that allow passage with a simple majority vote.

Why this matters: The provision has created unusual bipartisan opposition while highlighting the tension between federal oversight and state autonomy in emerging technology regulation.

• Both Democratic and Republican state lawmakers have opposed the measure.
• Digital safety advocates worry about unchecked AI development during rapid technological advancement.
• Leading AI executives, including OpenAI’s Sam Altman, have lobbied senators that state-by-state regulations would create a “patchwork” that stifles innovation.

Political pushback: Even some House Republicans who voted for the original provision are now expressing concerns about federal overreach.

• Rep. Marjorie Taylor Greene, R-Ga., came out against the AI regulatory moratorium after voting for it, admitting she hadn’t read that section of the bill.
• “We should be reducing federal power and preserving state power. Not the other way around,” Greene wrote on social media.

The procedural challenge: Senate Republicans must convince the chamber’s parliamentarian that their revised approach satisfies budget reconciliation rules.

• Sen. Ted Cruz, R-Texas, chairman of the Senate Commerce Committee, will make his case next week to the Senate parliamentarian.
• While parliamentarian rulings aren’t binding, senators from both parties typically follow their guidance.
• The funding-based approach is designed to meet requirements that provisions deal primarily with federal budget matters.

What they’re saying: Cruz defended the changes as fulfilling the Republican mandate from voters.

• “These provisions fulfill the mandate given to President Trump and Congressional Republicans by the voters: to unleash America’s full economic potential and keep her safe from enemies,” Cruz said in a statement.

Broader context: The AI provision is part of a larger tax package that extends 2017 rate cuts and includes steep social program reductions.

• The legislation also expands commercial spectrum ranges available for telecommunications use.
• Congress has struggled to reach bipartisan agreement on AI regulation despite general consensus that federal leadership is needed.
• Republicans and Democrats remain divided over divergent concerns about AI oversight and innovation.