The Blubber

his summer, the U.S. Senate will deliberate and vote on a sweeping tax and spending proposal that the Trump administration has dubbed One Big Beautiful Bill. A key provision in the legislation is a 10-year moratorium on state or local AI laws.

If enacted, the measure could upend efforts in more than 45 states that introduced AI-related bills last legislative session, as well as the 31 states that passed resolutions or enacted laws. However, the proposed ban does allow exceptions for state laws that support the development and deployment of AI technologies. The bill also has implications for enterprises and CIOs that have already invested in compliance—by adjusting internal practices, hiring external consultants, or engaging specialized legal counsel.

Advocates of the moratorium argue that halting the proliferation of a complex, inconsistent patchwork of state-level regulations will bring national uniformity. Critics, however, contend that the proposal raises more questions than it answers.

“This freeze might simplify things on the surface, but it raises the stakes for internal oversight and long-term thinking,”
said Ja-Naé Duane, faculty at Brown University and research fellow at MIT’s Center for Information Systems Research, in an email.
“For CIOs, the real work starts now.”

Despite the federal government’s traditionally hands-off stance on AI regulation, several experts told CIO Dive they were caught off guard by the breadth of the proposed freeze.

“There was, at least on my part, no expectation that there would be something quite this drastic,”
said Niloy Ray, shareholder at Littler and core member of its AI and Technology Practice Group.

Since taking office in January, the Trump Administration has swiftly overturned previous AI policies and ordered federal agencies to eliminate barriers to innovation. Vice President JD Vance promoted the administration's approach at the AI Action Summit in Paris this February, encouraging other nations to adopt similar strategies.

“I’m not here this morning to talk about AI safety,” Vance said in his keynote address.
“I’m here to talk about AI opportunity.”

U.S. state legislators have taken notice. In March, Texas introduced a scaled-down version of its AI Act. That same month, Virginia Governor Glenn Youngkin aligned with the federal deregulatory push by vetoing an AI bill that would have imposed new requirements and penalties on developers and deployers.

Supporters of the moratorium see it as a natural progression—a move aimed at easing compliance burdens and paving the way for national standards in AI governance.