Lawmakers passed President Trump's budget reconciliation but omitted a controversial ban on state-level AI regulation, reducing its effect on the tech sector. Originally proposed as a ten-year moratorium, the provision was revised to allow states to enforce AI rules if they forfeit access to rural broadband funds. The Senate overwhelmingly rejected this adjustment. The bill includes increased funding for rural broadband, with an additional $500 million allocated and eligibility expanded to include AI projects. Additionally, a tech-neutral approach may benefit companies like SpaceX's Starlink for broadband funding.
The part of the bill of most interest to the tech industry was its provision for a moratorium on state-level regulation of AI, which would have rendered all AI regulation that didn't come from the federal government unenforceable for 10 years.
The Senate killed that measure with a resounding 99-1 vote on Tuesday, leaving AI enforcement in the hands of the states.
The Senate bill adds an additional $500 million of broadband funding and broadens eligible projects to include AI infrastructure.
Now with the 'tech-neutral' approach, companies like Starlink will be able to secure funding.
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