A new provision quietly added to the House Budget Reconciliation bill would block both federal and state governments from passing any laws regulating artificial intelligence for the next 10 years.
The proposed language, introduced by Rep. Brett Guthrie (R-KY), states that “no State or political subdivision thereof may enforce any law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems during the ten-year period beginning on the date of the enactment of this Act.”
Sweeping Impact
If passed, the bill could wipe out years of efforts by states like California and New York to introduce guardrails around the rapidly evolving technology.
California, for example, passed a law requiring healthcare providers to disclose when generative AI is used to communicate with patients.
New York implemented a law mandating bias audits of AI tools used in hiring.
California is also set to enforce a 2026 law requiring developers to publish detailed documentation on the data used to train generative AI models, a major transparency measure that would also be nullified under this provision.
Americans for Responsible Innovation warned that the bill “could have devastating consequences,” especially as state lawmakers try to protect minors, workers, and people’s data privacy.
Tech industry influence appears to be playing a major role.
The bill reflects what critics say is growing alignment between AI companies and the Trump administration, which includes figures like Elon Musk, David Sacks, and Marc Andreessen.
404 Media pointed out that “the AI industry has been sucking up to Trump since before he got into office,” and noted that Trump has already undone several Biden-era executive orders meant to mitigate AI risks.
“They’re buying time aren’t they?? Classic corporate move,” said one X user.
“Giving them 10 whole YEARS of freedom is crazy. Are we seriously OK with this??”
No Regulation, Big Investment
In addition to banning regulation, the bill sets aside $500 million over ten years to fund AI and automation technologies within the federal government.
Critics argue this means the government wants to heavily rely on commercial AI while preventing any oversight of it.
According to 404 Media, the bill effectively acts as both a blank check to the AI industry and a silencing of all state efforts to regulate that industry.
Observers also raised questions about whether this provision even belongs in a reconciliation bill, which by Senate rules must focus on budgetary matters.
“Surely that wouldn’t be approved in a reconciliation bill,” wrote one commenter.
Meanwhile, others are worried about what could happen in a regulation-free AI landscape.
Critics point to recent examples of harm, like deepfakes targeting women, AI companions marketed to teens, and unchecked environmental impacts from data centers.
As one user sarcastically summed up the concern: “So, the plan is to let AI run wild for a decade while we debate whether it should be allowed to know our middle names? Perfect.”
The reconciliation bill, which also includes cuts to Medicaid and climate funding, remains in limbo. Whether the AI language survives the final version is still unclear.