AI Regulation Showdown: What a 10-Year Federal Freeze Means for States

A political showdown is brewing in Washington over who gets to regulate artificial intelligence—and the stakes are massive. Hidden within President Trump’s proposed tax cut bill is a provision that would halt all new state-level AI regulations for the next 10 years. It’s a move that’s ignited rare bipartisan opposition, particularly from state attorneys general who argue that local governments must be able to respond to emerging tech threats.

What the 10-Year Freeze Would Do

The proposal, backed by House Republicans, aims to:

• Freeze all new AI regulations at the state level for a decade
  
  

• Allocate $500 million to fund the creation of a federal AI regulatory framework
  
  

• Prevent a patchwork of AI laws across states that tech companies argue are burdensome and inconsistent
  
  

As California Rep. Jay Obernolte puts it, navigating “1,000 different pending bills in state legislatures” would be impossible for businesses operating nationally. Google supports the freeze, calling it “an important first step” in maintaining U.S. national security and AI leadership.

Why States Are Pushing Back

More than 40 state attorneys general—from both red and blue states—have united to oppose the measure. Republican AGs from states like Ohio, Tennessee, and Utah have joined Democratic counterparts in saying the freeze strips states of their ability to protect residents from real, present AI risks.

California Attorney General Rob Bonta, representing a state home to AI leaders like OpenAI and Google, said: “States must be able to protect their residents by responding to emerging and evolving AI technology.”

What’s at Risk If the Freeze Passes?

If the measure becomes law, several recently passed and proposed state-level protections could be rolled back or stalled, including:

• Bans on AI-generated deepfake pornography
  
  

• Restrictions on unauthorized AI in political ads
  
  

• Mandates for healthcare providers to disclose AI use to patients
  
  

• Limits on AI-driven decisions in insurance claims and medical necessity
  
  

These aren’t hypothetical scenarios. States are reacting to issues already affecting consumers, and the freeze could leave them unprotected for the next decade.

What Happens Next?

The proposal has passed the House but still faces major challenges. To become law, it must pass the Senate and survive the budget reconciliation process, which is typically reserved for fiscal legislation—not sweeping regulatory changes. The strong bipartisan resistance from state officials indicates a tough road ahead.

The Bigger Question

At the heart of the debate is a fundamental question:

• Should states retain the right to protect their citizens from fast-moving AI threats?
  
  

• Or is a centralized, national approach the only way to ensure consistent and effective AI governance?
  
  

Whatever the answer, the outcome will set the tone for how America handles artificial intelligence for the next decade—and possibly beyond.