US Senate votes 99-1 to strip AI provision from Trump's tax Bill
Senators voted 99-1 early on Tuesday (Jul 1) to strip the language out of US President Donald Trump's signature tax legislation during a marathon all-night voting session. The overwhelming opposition came despite widespread support for the pause on state AI legislation from GOP allies in Silicon Valley and White House technology advisers Michael Kratsios and David Sacks.
The measure was the top priority for major technology companies including Microsoft and Meta Platforms, as well as venture capital firms like Andreessen Horowitz, which back other powerful players. Trump allies in Silicon Valley, including venture capitalist Marc Andreessen, defence tech firm Anduril Industries founder Palmer Luckey and Palantir Technologies co-founder Joe Lonsdale all advocated for including the restriction.
Senator Marsha Blackburn, whose state of Tennessee is home to the Nashville music industry, led the effort to scrap the provision. She had raised concerns the measure would block her home state's Elvis Act, a law that prohibits the non-consensual use of AI to mimic musicians' voices.
The state AI legislation freeze would have barred states from passing AI legislation if they received broadband funding from a US$500 million federal programme.
Before the vote, Senator Ted Cruz of Texas expressed frustration that a compromise he had brokered with Blackburn to keep a more limited AI measure in the Bill had collapsed. Cruz himself, who championed the state AI regulation pause, ultimately voted to strip it from the Bill.
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Commerce Secretary Howard Lutnick threw his support behind the AI measure, as well, calling it imperative for national security and a step towards quashing blue-state efforts to pass comprehensive AI legislation. Though advocates pushed for Trump to make his own statement supporting the provision in the tax Bill, he ultimately did not weigh in publicly.
States across the country have enacted dozens of new laws intended to Americans against risks posed by AI, such as unauthorised deepfakes, copyright violations and algorithmic discrimination. More than 1,000 AI Bills have been proposed at the state level. At the same time, Congress has yet to pass sweeping regulations.
Opponents of the state AI pause took a victory lap on Tuesday, applauding Blackburn for killing the effort.
'The moratorium threatened to halt kids online safety laws, artist and creator protections, and a range of consumer safeguards and tech transparency measures, all without any federal replacement,' said Brad Carson, president of the AI safety advocacy group Americans for Responsible Innovation. 'Let this be a lesson to Congress – freezing state AI laws without a serious replacement is a political nonstarter.'
Despite the Senate's move, the tech industry will likely continue to push for curtailing state AI legislation. That the provision initially received broad support shows that Republican Party power centres are firmly behind the AI industry's wish for minimal regulatory interference.
Senator Thom Tillis of North Carolina, who on Sunday announced he would retire from the Senate, was the sole lawmaker to support keeping the AI provision in the Bill. BLOOMBERG
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