Have you heard of the Big Beautiful Bill? It’s been in the news lately for a its provisions covering a variety of policies including Medicaid and immigration. What hasn’t been talked about quite as much is its inclusion of policies affecting technology development in the US, specifically as it pertains to states being able to regulate AI. Let’s talk.

So what’s the Big Beautiful Bill again?

Officially, its named the One Big Beautiful Bill Act, and it covers several provisions affecting tax, spending, and other policies. The bill has already passed the House and is expected to be voted on by the Senate after Independence Day. The President has championed the bill, so if it passes the Senate, the bill is basically guaranteed to be signed into law.

What does the Big Beautiful Bill say about states regulating AI?

The bill includes a rule that bans states from regulating AI for the next 10 years. This rule is under a section about the Commerce Department and says that states cannot regulate AI systems that are engaged in interstate commerce, which refers to conducting business in multiple states or across state lines. Also, this rule doesn’t just apply at the state level, but also “political subdivisions”. This likely means that counties or cities or any other type of municipality are subject to this ban as well.

So the states can’t regulate AI at all?

So the bill has a few exceptions. First the bill makes it clear that the ban is relates to interstate commerce. If for some reason an AI system were only operating in a single state, then I imagine the state could make rules for that system. Also, the bill makes it clear that if the law pertains to other systems that also perform a similar function, but don’t use AI as the method, then those laws could be okay as well. Finally, the bill ensures that any state law that is making it easier for AI to operate is also welcomed and the bill would not stop that type of state law.

Why would the US government want to stop state regulation?

In the race to develop AI systems, US companies are in competition with other countries from around the world, particularly China. The administration does not want US companies to be at a disadvantage attempting to follow laws from various individual states. It would be simpler for US AI companies if laws regulating AI were federal and therefore the same across the country.

So banning state regulation is a good thing then?

Maybe, maybe not. AI may change our lives in ways we can not anticipate yet. Regulation at the state level may help protect us from AI models that don’t do enough to protect our privacy, don’t limit bias/unfairness, and other things.

Some also criticize that a spending bill should not include this type of provision. So we’ll see if the ban makes it into the Senate version of the bill and how that is reconciled before it is possibly made law.

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