The Trump administration's new tax bill, referred to as the 'big, beautiful bill', aims to impose a five-year moratorium on state enforcement of AI regulations. Initially, the rule proposed a ten-year ban but was revised to include exemptions for specific cases such as deceptive practices and child sexual abuse. If the bill passes, while existing state laws remain on the books, they would be effectively rendered powerless unless states comply, creating financial penalties. This could lead to significant disparities in AI regulation and funding across different states, as noted by policy experts.
Federal AI policy remains unclear as the administration prepares to release its AI policy, creating a vacuum that has led states to introduce their own AI regulation bills.
The new tax bill includes a rule to prevent states from enforcing AI legislation for five years and withhold funding for non-compliance.
Jonathan Walter stated that "State and local governments should have the right to protect their residents against harmful technology and hold the companies responsible to account."
The move creates a patchwork imbalance in the country; some states may have stringent laws but lack funding, while others avoid regulation with plentiful resources.
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