Why Congress Must Pass the AI Regulation Moratorium on States
In fact, state legislatures across the country have unleashed a tsunami of AI-related bills—more than 1,000 this year alone. Some target algorithms. Others impose documentation requirements or vague liability rules. Few reflect a concrete understanding of the underlying technology. None reflects a national strategy.
This patchwork of mandates and rules is creating legal uncertainty and compliance headaches at the exact moment American innovators need to move fast and scale. This is like tying our own shoelaces together at the starting line of a global sprint.
Apple iPhone screen with icons of AI apps.
Apple iPhone screen with icons of AI apps.
Getty Images
That's why the House-passed One Big Beautiful Bill includes a 10-year moratorium on new state-based AI mandates. This is a smart move. Under the moratorium, states would still safeguard their citizens and vulnerable populations, enforcing civil rights, consumer protection, and discrimination laws related to AI. But they wouldn't be able to add new, conflicting AI-specific requirements that undermine U.S. national competitiveness.
This isn't about shielding Big Tech. It's about empowering small businesses, startups, and local innovators who can't afford 50 different legal playbooks. The moratorium protects them, not monopolies, by giving every American entrepreneur a fair shot to compete.
This is not a novel approach.
In the 1990s, when the internet was still in its infancy, Congress passed the Internet Tax Freedom Act, temporarily barring state and local taxes on online activity. The goal was to give the internet space to grow—and it worked. As a result of this future-focused action, America dominated the information age, a free and open internet became the global standard, and today, we lead the world in digital services. All because Washington recognized early that a fractured legal map would strangle a network built to connect.
AI is no different. In fact, the stakes are even higher.
China is moving full steam ahead with a unified, government-backed strategy to win the AI race. The Chinese Communist Party (CCP) has already committed more than $1.4 trillion to dominate AI and other strategic technologies. It is embedding AI in its military, economy, and foreign policy infrastructures at a breakneck pace. And it's flooding the globe with cheap AI models that censor dissent and reinforce authoritarian norms.
At home, China is building a national AI ecosystem and coordinating policy across education, infrastructure, and research and development (R&D). Their open-source models already rival, and in some cases surpass, those from U.S. developers.
The U.S. can't beat that with a fractured, state-by-state approach. If each state imposes its own rules on how AI is built, trained, and deployed, we won't see innovation—we'll get bottlenecks, legal gridlock, and capital flight.
The 10-year moratorium gives Congress time to work with industry, researchers, regulators, and communities to craft a smart, national AI framework. No one is calling for a digital Wild West. But if we don't work from a national strategy, we'll invite chaos and confusion. Guardrails for high-risk AI models may be needed, but they must be grounded in expertise, calibrated for real risk, and updated as the technology evolves. Rushing into a patchwork of uncoordinated state laws will only slow American innovation and give China an opportunity to surge ahead and win this tech race.
And if that happens, it would be a strategic failure with generational consequences. AI is the defining technology of this era. The country that leads in developing and deploying it will capture trillions of dollars in economic value, shape global supply chains, and gain a decisive military advantage. If we lose, China will transform the global internet from a platform of freedom and opportunity into a tool for censorship and control.
That's not how we secure our future: it's how we lose it. If we want to protect American jobs, families, and values, we must ensure that the U.S.—not China—shapes the future of AI. The U.S. Senate can help ensure this by keeping the 10-year moratorium in place and protecting America's ability to lead in the most important technology of our time. In turn, we will be able to ensure the global digital future is shaped by freedom, not authoritarian control.
Doug Kelly is CEO of American Edge Project.
The views expressed in this article are the writer's own.
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