Ted Cruz plan to punish states that regulate AI shot down in 99-1 vote

Facing overwhelming opposition from both Democrats and Republicans, Sen. Ted Cruz (R-Texas) accepted defeat and joined a 99-1 vote against his own plan to punish states that regulate artificial intelligence.

"The Senate came together tonight to say that we can't just run over good state consumer protection laws," Sen. Maria Cantwell (D-Wash.) said. The Cruz plan would have thwarted state laws related to robocalls, deepfakes, and autonomous vehicles, she said.

The House previously approved a budget bill with a provision to ban state AI regulation for 10 years. The Senate has a rule against including "extraneous matter" in budget reconciliation legislation, which Cruz tried to get around by proposing a 10-year moratorium in which states would be shut out of a $42 billion broadband deployment fund if they try to regulate AI.

The Senate passed the overall budget bill today in a 51-50 vote. Cruz's office said in early June that his proposal aimed to prevent states "from strangling AI deployment with EU-style regulation." Less than three weeks later, his home state of Texas enacted a law regulating the use of artificial intelligence.

Cruz changed his plan, saying that states regulating AI would only be shut out of a $500 million AI fund instead of the $42 billion broadband fund. But Cantwell's office said the new version contained a backdoor that could still threaten states' access to the entire broadband fund.

Sen. Marsha Blackburn (R-Tenn.) teamed up with Cantwell to fight Cruz's plan. Blackburn briefly reached a compromise with Cruz on a five-year moratorium that would allow some forms of AI regulation but then decided the compromise wasn't good enough.

"While I appreciate Chairman Cruz's efforts to find acceptable language that allows states to protect their citizens from the abuses of AI, the current language is not acceptable to those who need these protections the most," Blackburn said in a statement quoted by Politico last night. "This provision could allow Big Tech to continue to exploit kids, creators, and conservatives. Until Congress passes federally preemptive legislation like the Kids Online Safety Act and an online privacy framework, we can't block states from making laws that protect their citizens."