Sen. Ted Cruz’s AI Moratorium Faces Blowback from Both GOP and Dems
Sen. Ted Cruz is pushing a 10-year moratorium that blocks states from regulating AI if they want access to $500 million in federal AI infrastructure money. His move, part of a GOP tax-and-spending bill, is stirring rare bipartisan resistance.
The issue started with Cruz tying states’ hands in AI rules to the funding. Texas just passed a tough AI law that could lose this federal cash under Cruz’s plan. 
Sen. Maria Cantwell warns this loophole might threaten access to $42 billion in broadband funds, not just the $500 million pot. She called it holding “funding hostage” against consumer protections.
GOP Senators Marsha Blackburn, Josh Hawley, Rand Paul, and Ron Johnson oppose the moratorium. Blackburn and Hawley sent a letter to Senate Majority Leader John Thune opposing the provision. Hawley vowed on Steve Bannon’s podcast to strip it from the bill if needed.
Sen. John Cornyn is wary too, unsure about federal AI rules keeping pace with tech, though worried about state law impacts.
Americans for Responsible Innovation is lobbying against Cruz, saying states need flexibility to protect consumers amid evolving AI concerns.
Texas lawmakers like Sen. Angela Paxton call the provision “federal overreach” that could block protections against deepfake child pornography and other AI rules. The Alliance for Secure AI is launching a paid campaign targeting conservative viewers to highlight Cruz’s previous AI alarms.
Proponents argue state patchworks hinder AI innovation and U.S. competition with China.
Doug Kelly of American Edge Project said:
“We’re in a race with China to lead the future of artificial intelligence.”
“A fractured, state-by-state system will only slow us down.”
But critics warn the bill prioritizes innovation over consumer safety.
Mark Beall of AI Policy Network said:
“When you say the federal government will do nothing and the state’s completely prevented from doing something, you’re kind of deciding on their behalf that we’re going to prioritize innovation over everything else.”
“While he thinks innovation is vital to American interests, past legislation that has prioritized innovation — such as free trade agreements — ‘had consequences for the American people,’ Beall said.”
The House passed a harsher ban on AI rules. Cruz softened it to tie funding to no regulation, fitting Senate budget rules for advancing the larger bill.
The AI moratorium clash is setting up a Senate floor fight, with both parties ready to push amendments to kill or keep Cruz’s provision. Most Democrats back scrapping it. Only a handful of GOP defections would be needed.
Stay tuned as the Senate parliamentarian reviews the issue and senators debate whether states can regulate AI — or must sacrifice billions in funding.
