WASHINGTON – Senate Republicans have walked back a controversial artificial intelligence (AI) provision in President Donald Trump’s sweeping tax and domestic policy legislation following bipartisan criticism over the proposal’s broad scope and potential consequences.
The original measure, included in the House version of the bill passed on May 22, sought to block states from enacting or enforcing any laws that would “limit, restrict, or otherwise regulate” AI models, AI systems, or automated decision-making tools in sectors such as trade, traffic, and transportation—for a full decade. The provision immediately drew fire from lawmakers across the political spectrum, with many raising red flags about federal overreach and the uncertain future of AI technology.
AI has become a lightning rod in public and political debate, fueled by growing concerns over deepfakes, misinformation, and scams that exploit algorithmic tools. While the Trump administration has largely aligned with the tech industry’s position that regulation hampers innovation, critics argue that the technology is evolving too quickly to be left unregulated—especially for 10 years.
Facing mounting resistance, Senate Republicans on the Commerce, Science, and Transportation Committee unveiled their revised draft of Trump’s bill on June 5. In a significant shift from the House version, the new language proposes tying the AI regulation ban to federal grant funding rather than making it an outright prohibition.
Under the Senate proposal, states that agree to a temporary moratorium on regulating AI would become eligible to receive money from the Broadband Equity, Access, and Deployment (BEAD) program—a $42.45 billion federal initiative aimed at expanding high-speed internet access across the U.S., according to the National Telecommunications and Information Administration (NTIA). Grant recipients could then use that funding to build out infrastructure related to AI systems.
The revised approach offers a more carrot-than-stick strategy and is widely seen as a concession to critics who warned that a sweeping federal override of state authority would be premature, if not reckless.
“This is a significant departure from the original provision,” said one Senate staffer familiar with the rewrite. “It signals a recognition that states need some degree of flexibility, especially when dealing with emerging technologies.”
Among those who blasted the House bill was Republican Rep. Marjorie Taylor Greene of Georgia, who expressed outrage once she learned of the provision’s scope. “We have no idea what AI will be capable of in the next 10 years, and giving it free rein while tying states’ hands is potentially dangerous,” she tweeted on June 3. “I wouldn’t have voted for the bill had I known this was in it.”
Her criticism was echoed—unexpectedly—by California Democrat Rep. Ted Lieu, the vice chair of the House Democratic Caucus, who quipped at a June 4 press conference, “I agree with Marjorie Taylor Greene once every hundred years. This is that time.”
Texas Rep. Greg Casar, chair of the Congressional Progressive Caucus, also weighed in sharply. “Writing big tech companies a blank check to exploit AI however they want is the opposite of what the American people want,” he said.
Even among those who backed the bill in the House, concerns linger. Texas Rep. Chip Roy, a member of the conservative House Freedom Caucus, defended his vote but emphasized the importance of giving governors the power to protect their own citizens. “Especially when you’re talking about a technology that’s so new and fluid, local control matters,” he told reporters.
As negotiations continue, it remains unclear whether the Senate’s revised language will be included in the final version of the bill. Trump and GOP leadership have set a July 4 deadline to pass the legislation through both chambers and send it to the president’s desk for signature—a timeline that leaves little room for internal party disputes or bipartisan negotiations to derail the process.
What’s clear, however, is that the AI provision—once a little-noticed section of a massive legislative package—has emerged as one of the most contentious and consequential flashpoints in the fight over federal tech policy.
