UPDATE — NOVEMBER 2025: The proposed federal moratorium on state and local AI regulation—which would have paused state-level AI laws for up to ten years—was officially struck down in July 2025. The provision was initially included in a House-passed budget reconciliation bill, but the U.S. Senate voted 99–1 to remove it after intense bipartisan opposition. Critics argued the moratorium would have undermined states’ rights and delayed urgently needed consumer and labor protections, while supporters claimed it would have reduced legal fragmentation and given Congress time to establish a national AI framework.
The final version of the bill, signed by President Trump on July 4, 2025, excluded the moratorium entirely. This outcome means states remain free to regulate AI independently, resulting in what analysts have dubbed a “state AI regulation gold rush.” States like California, Colorado, and Texas are now leading the charge with their own AI governance frameworks, ranging from bias audit requirements to data transparency and accountability standards.
Although this attempt at federal preemption failed, Congress is still expected to revisit national AI legislation, particularly as the administration continues advancing its AI Action Plan under Executive Order 14179. For now, however, the United States remains a patchwork of AI laws—leaving companies to navigate a rapidly expanding and often inconsistent state regulatory landscape.
ORIGINAL NEWS STORY:
U.S. House Committee Advances AI Moratorium
A key U.S. House committee has advanced a proposal that would impose a 10-year federal moratorium on state and local regulation of artificial intelligence, drawing widespread concern from policymakers and privacy advocates across the country.
The measure, included in a broader budget reconciliation package, passed the House Energy and Commerce Committee by a 29-24 vote. If enacted, it would prevent states from passing or enforcing laws that govern the use of AI systems or automated decision-making technologies until 2035. The moratorium is tied to a proposed \$500 million federal investment in AI modernization efforts and is framed as a move to ensure national consistency in AI governance.
Supporters of the provision say the pause on state-level laws is intended to prevent a fragmented patchwork of regulations that could slow innovation, increase compliance costs for developers, and weaken the United States’ global competitiveness in AI. The federal government would take the lead in developing a unified approach to AI oversight during the moratorium period.
However, the proposal has sparked opposition from lawmakers in multiple states, who argue that restricting their ability to act on AI-related harms undermines public safety and state sovereignty. Several state legislators and policy organizations have voiced concern that the moratorium would hinder timely responses to emerging risks associated with AI, such as algorithmic discrimination, surveillance, and safety failures in autonomous systems.
The National Conference of State Legislatures has publicly opposed the measure, citing the importance of legislative flexibility in adapting to the fast-paced evolution of technology. While some governors have expressed openness to a federal AI framework, others worry that a blanket moratorium could delay necessary protections for consumers and workers.
The bill’s path forward remains uncertain, though its placement in a reconciliation package means it could be passed with a simple majority in Congress. If signed into law, the moratorium would mark a significant shift in AI policy, centralizing regulatory authority at the federal level while suspending state and local action for the next decade.
The move comes at a time when several states—including Colorado, California, and Utah—are actively developing or enforcing AI-related laws aimed at improving transparency, accountability, and public trust in emerging technologies.
Need Help?
If you’re concerned or have questions about how to navigate the U.S. or global AI regulatory landscape, don’t hesitate to reach out to BABL AI. Their Audit Experts can offer valuable insight and ensure you’re informed and compliant.
