The AI Moratorium Debate: Senate Vote, State Laws, and Data Centers

The AI moratorium was a proposed 10-year federal ban that would have blocked states from enforcing their own artificial intelligence laws. The U.S. Senate stripped it from the One Big Beautiful Bill Act on July 1, 2025, in a 99–1 vote, but the Trump administration has continued pushing for federal preemption of state AI rules through an executive order and a legislative framework. A separate proposal from Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez would impose a different kind of moratorium: a pause on building new AI data centers.

What the 10-Year Moratorium Would Have Done

The moratorium lived inside Section 43201(c) of the One Big Beautiful Bill Act, a tax and spending reconciliation package the House passed on May 22, 2025. The provision would have barred states and local governments from enforcing any law or regulation specifically targeting AI models, AI systems, or automated decision systems for 10 years, with a narrow carve-out for criminal law.¹ The reach was broad: existing statutes in California, Colorado, Illinois, and Utah, plus more than 1,000 pending AI bills in state legislatures, would have been swept aside.²

The provision was paired with a $500 million appropriation for the Department of Commerce to modernize its AI and IT systems. Legal analysts questioned whether a preemption of state authority could survive the Senate’s Byrd rule, which limits reconciliation bills to matters primarily affecting federal spending or revenue.³

How the Senate Killed It

During an overnight session on June 30 into July 1, 2025, Senators Marsha Blackburn (R-Tenn.) and Maria Cantwell (D-Wash.) introduced an amendment to strip the provision. A compromise offer that would have shortened the ban to five years and carved out laws like Tennessee’s ELVIS Act, which protects artists from unauthorized AI voice cloning, failed because senators from both parties still found the language too broad.⁴ The Senate then voted 99–1 to remove the moratorium entirely.⁵

The vote reflected a coalition that crossed party lines. Seventeen Republican governors, led by Arkansas Governor Sarah Huckabee Sanders, wrote to congressional leaders calling the moratorium the “antithesis of what our Founders envisioned” and defending states as “laboratories of democracy” on AI.⁶ A bipartisan coalition of 36 state attorneys general later warned that “broad federal preemption would undermine states’ ability to respond quickly and effectively to emerging AI risks.”⁷ Florida Governor Ron DeSantis called the proposal “a subsidy to Big Tech” that “lets technology companies run wild.”⁸

Who Wanted the Moratorium

The push came largely from industry. On June 9, 2025, the U.S. Chamber of Commerce led a coalition of roughly 200 local chambers from more than 40 states in a letter to the Senate arguing that a decade-long freeze was needed to prevent a “growing patchwork of state and local laws” from choking AI deployment.⁹ The National Association of Manufacturers backed the moratorium and called for a “light-touch” federal approach.¹⁰

Colorado Governor Jared Polis, a Democrat, joined Republican Representative Jay Obernolte of California in calling for a “cohesive federal approach.” Obernolte characterized AI as “very clearly an interstate commerce issue.” Supporters pointed to the volume of state activity, more than 1,000 AI-related bills in the first five months of 2025 alone, as evidence that Congress needed to act.¹

Who Opposed It and Why

Opposition came from an unusual alliance. More than 50 civil rights and consumer groups, including the ACLU, NAACP, Electronic Frontier Foundation, and Center for Democracy and Technology, signed a letter organized by the Leadership Conference on Civil and Human Rights warning that the moratorium would prevent enforcement of state civil rights laws and allow “unchecked harm to proliferate” for a decade.¹¹ The coalition pointed to automated decision systems that screen out Black and Latino renters and deny benefits to people with disabilities.

The Brennan Center for Justice called the ban “dystopian.” The Heritage Foundation argued it would override legitimate state efforts to curb “Big Tech’s worst abuses.” The American Association for Justice warned that the “broad and clumsily drafted” language could block civil actions related to wrongful death, insurance discrimination, medical misdiagnosis, consumer scams, and physical injury to children.¹²

State insurance regulators, through the National Association of Insurance Commissioners, raised a concrete drafting concern: the bill’s definition of AI was so broad it could reach standard business tools like spreadsheets and databases used for rate setting and claims processing, blocking oversight even where no AI was involved.¹³ They also warned of direct conflict with the McCarran-Ferguson Act, which has traditionally shielded state insurance authority from federal preemption.¹⁴

State Laws That Were on the Line

Had the moratorium survived, it would have swept aside a growing body of state AI legislation. An analysis by Americans for Responsible Innovation identified several laws likely to be blocked, including Colorado’s SB 24-205 regulating high-risk AI systems, Utah’s Artificial Intelligence Policy Act requiring generative AI disclosures, California’s AI Transparency Act, and Illinois laws prohibiting AI-driven discrimination in hiring.¹⁵

Other laws at risk included Tennessee’s ELVIS Act, Texas data privacy provisions allowing consumers to opt out of automated profiling, Connecticut restrictions on algorithmic targeting of minors, and Virginia’s law criminalizing synthetic media used to defraud or defame.¹⁵

The Executive Order That Opened a Second Front

With the legislative moratorium dead, the Trump administration turned to executive power. On December 11, 2025, President Trump signed Executive Order 14,365, “Ensuring a National Policy Framework for Artificial Intelligence.”¹⁶ The order set up several mechanisms aimed at state AI laws:

An AI Litigation Task Force inside the Department of Justice, created within 30 days, charged with suing states on Commerce Clause and federal preemption grounds.
Instructions to the Commerce Department to make states with “onerous” AI laws ineligible for remaining Broadband Equity Access and Deployment (BEAD) Program funds, and direction to other agencies to explore conditioning discretionary grants on states refraining from enforcing conflicting AI rules.
Direction to the FCC to consider federal AI reporting standards that would override state laws, and to the FTC to issue a policy statement explaining how federal prohibitions on unfair and deceptive practices preempt state laws requiring AI models to alter their outputs.

The order targeted state laws that, in the administration’s view, require AI to embed “ideological bias” or produce “false results” to avoid findings of algorithmic discrimination, and it named Colorado’s AI Act as an example. It carved out child safety protections, AI data center infrastructure, and state government procurement.¹⁶

The order itself does not repeal any state law. Existing state statutes remain in effect unless a court blocks them or Congress preempts them. Officials in Colorado and California have said they intend to sue, and legal scholars cite the 2023 Supreme Court decision in National Pork Producers Council v. Ross as evidence that states retain significant authority to regulate commerce within their borders.¹⁷

Other Vehicles Congress Considered

After the reconciliation defeat, moratorium supporters looked elsewhere. Reports suggested House Republican leaders considered inserting preemption language into the National Defense Authorization Act for 2026. The NDAA text released on December 7, 2025 did not include the provision.⁸ More than 200 state lawmakers formally urged Congress to reject it, and Senator Josh Hawley and Representative Marjorie Taylor Greene publicly opposed it.¹⁸

Senator Ted Cruz of Texas, who chairs the Senate Commerce Committee, introduced the SANDBOX Act (S. 2750) in September 2025. It would let AI developers apply for waivers from federal regulations they argue impede their work, with the Office of Science and Technology Policy coordinating reviews. The U.S. Chamber of Commerce and the Information Technology Industry Council supported it. No further action had been reported as of mid-2026.¹⁹

On March 20, 2026, the White House released “A National Policy Framework for Artificial Intelligence: Legislative Recommendations,” a set of nonbinding proposals for Congress.²⁰ It asks Congress to preempt state AI laws in three areas: AI development, use of AI for activities that would be lawful without AI, and AI developer liability for unlawful third-party conduct. States would keep authority over consumer protection, fraud prevention, zoning, and their own procurement.²¹ The framework also proposes parental tools for children’s privacy on AI platforms, age-assurance requirements, a “ratepayer protection pledge” so tech companies pay for electricity consumed by AI data centers, and streamlined permitting for AI-related power generation. It discourages creating any new federal regulatory body for AI.

The Separate Sanders-Ocasio-Cortez Data Center Moratorium

A different proposal, sometimes confused with the state-preemption fight, targets the physical infrastructure behind AI rather than state laws. Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez introduced the Artificial Intelligence Data Center Moratorium Act on March 25, 2026. It would impose an immediate federal pause on the construction of new AI data centers until national safeguards are established.²²

The pause would remain in place until safeguards ensure AI products are safe and protect civil rights and privacy, that economic gains benefit workers, and that data centers do not raise utility prices for surrounding communities or cause environmental harm. The bill would also ban U.S. exports of AI computing infrastructure to countries lacking equivalent protections. Ocasio-Cortez cited AI-driven surveillance, sexually explicit deepfakes, and local electricity bills inflated by data center consumption. The bill was introduced in both chambers but had no reported committee action or additional cosponsors as of mid-2026.²³

Where Things Stand

No federal AI moratorium of either type is currently in effect. State AI laws remain enforceable, and states continue to pass more of them: 38 enacted or adopted AI-related legislation in 2025 alone, including Colorado’s Consumer Protections in Interactions with Artificial Intelligence Systems Act and the Texas Responsible Artificial Intelligence Governance Act.²⁴ The administration is pursuing preemption through Justice Department litigation, agency rulemakings, funding conditions, and legislative recommendations, while states have signaled they will fight those efforts in court. The question of who governs AI in America is unresolved, and the fight has moved from a single reconciliation vote into a longer campaign across courts, agencies, and successive bills.

1
R Street Institute. AI Moratorium Questions
2
Goodwin Procter LLP. House Passes 10-Year Federal Moratorium
3
Lawfare. The House Reconciliation Bill’s AI Preemption Clearly Violates the Byrd Rule
4
The Conference Board. Senate Rejects Proposed AI Regulatory Moratorium
5
PBS NewsHour. Senate Pulls AI Regulatory Ban From GOP Bill After Complaints From States
6
Office of Governor Sarah Huckabee Sanders. Sanders Leads Republican Governors to Call on Congress to Remove AI Regulatory Moratorium
7
National Association of Attorneys General. Bipartisan Coalition of 36 State Attorneys General Opposes Federal Ban on State AI Laws
8
StateScoop. State AI Law Moratorium Omitted From 2026 Defense Bill
9
U.S. Chamber of Commerce. Coalition Letter to the Senate Supporting the Moratorium on AI Regulation Enforcement
10
National Association of Manufacturers. Tech Manufacturers, NAM Call for Consistent, Light-Touch AI Rules
11
Center for Democracy & Technology. Joint Letter to Congress Opposing AI Moratorium
12
U.S. Senate Committee on Commerce. 10 More Organizations, 10 More Reasons to Oppose 10-Year AI Moratorium
13
National Association of Insurance Commissioners. Letter Opposing AI Moratorium
14
National Association of Insurance Commissioners. Opposition to AI Moratorium
15
Tech Policy Press. The State AI Laws Likeliest to Be Blocked by a Moratorium
16
The White House. Ensuring a National Policy Framework for Artificial Intelligence
17
The Regulatory Review. President Trump Targets State-Based AI Regulations
18
The Hill. Lawmakers Oppose Federal AI Preemption
19
U.S. Senate Committee on Commerce. Sen. Cruz Unveils AI Policy Framework to Strengthen American AI Leadership
20
The White House. National Policy Framework for Artificial Intelligence Legislative Recommendations
21
Georgetown CSET. Unpacking the White House National Policy Framework for AI
22
Office of Sen. Bernie Sanders. Sanders, Ocasio-Cortez Announce AI Data Center Moratorium Act
23
U.S. Congress. S.4214 – Artificial Intelligence Data Center Moratorium Act
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Ropes & Gray. Examining the Landscape and Limitations of the Federal Push to Override State AI Regulation