Fate of 10-Year AI Moratorium Uncertain in the Senate

The Senate returns to Washington on June 2, and Senate Majority Leader John Thune, R-S.D., has said Republicans want to send a budget package to President Donald Trump’s desk before July 4. Many have speculated about whether the AI moratorium will conform to the Byrd Rule, which allows the Senate parliamentarian to limit the reconciliation process to budget-related provisions.

“There are a lot of different views that will be considered, but I think there are good arguments” drawing a budgetary link between the AI moratorium and the House package’s $500 million allocation for the Commerce Department to modernize federal IT systems over 10 years, said Hogan Lovells regulatory advisor Ryan Thompson, who advises tech and telecommunications clients. “My sense is they were drafting this with the expectation that it would be able to get through the Byrd bath process,” Thompson said in an interview Monday.

The $500 million line item included in HR-1 would fund a federal IT modernization project through September 2035. Rep. Jay Obernolte, R-Calif., who helped draft the moratorium language, told us Tuesday that Republicans have made a “pretty straightforward case” about why the moratorium is fiscally related” (see 2505210065).

The fiscal link is “very tenuous,” said George Washington University Associate Professor of Law Alicia Solow-Niederman in an interview Friday. “I do not think this provision ... should pass the so-called Byrd bath. I do not see it as sufficiently related to the budgetary measures. I see it as a regulatory provision that should properly be cut in the Senate.” Regardless of views on state preemption, it’s important to have “robust discussion” on such an important topic, she said: “I hope that the Senate parliamentarian does strike this because I think that we need to have a real conversation about what AI regulation should look like.”

Some state regulators continue to mobilize in opposition. Rep. Pramila Jayapal, D-Wash., told us Tuesday that Washington state Insurance Commissioner Patty Kuderer reached out to her office about the impact on regulating entities using AI models. Kuderer told us in a statement she’s convening an AI advisory board to “ensure this technology is used responsibly, safely and equitably by the insurance industry.” Blocking states from holding companies “accountable for how they use an unproven and, frankly, potentially dangerous piece of emerging technology puts corporate freedom and profits above our digital safety,” she said. “As I always say, one person’s regulation is another’s consumer protection.”

The moratorium is a “terrible idea,” said Jayapal.

House Judiciary Committee Chairman Jim Jordan, R-Ohio, told us he supports the language and hasn’t heard anything about the possibility of the provision getting dropped in the Senate. “You don’t want 50 states” regulating AI in 50 different ways, he said.

Thompson highlighted the fact that Senate Commerce Committee Chairman Ted Cruz, R-Texas, announced his support for the moratorium, which shows Senate Republican ranks have considered the Byrd Rule implications. Sens. Marsha Blackburn, R-Tenn., and Josh Hawley, R-Mo., have signaled they could potentially oppose the moratorium.

NetChoice and the Computer & Communications Industry Association support the moratorium. A bipartisan group of 40 state attorneys general earlier this month asked Congress to reject the proposal (see 2505160057). The California Privacy Protection Agency is also opposed.