Ted Cruz wants to stop states from regulating AI. Some of his Republican colleagues aren’t so sure

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WASHINGTON — U.S. Sen. Ted Cruz is trying to stop states from regulating artificial intelligence in the GOP’s landmark tax-and-spending bill, but he’s meeting resistance from colleagues on both sides of the aisle.

A rare alliance is forming between Democrats and hardline Republicans who are working to imperil Cruz’s push as outside groups are lobbying senators and launching targeted messaging campaigns, setting the stage for a possible floor fight.

The AI moratorium — which Cruz has spent the last few weeks spearheading as chair of the powerful Senate Commerce, Finance and Transportation Committee — would only let states tap into the bill’s $500 million AI infrastructure fund if they forgo regulating the technology for the next 10 years. In Texas, a sweeping AI regulatory bill that Gov. Greg Abbott just signed into law would likely put this money in jeopardy.

Sen. Maria Cantwell of Washington, the highest-ranking Democrat on the committee, has raised concerns that a loophole in the legislation would actually jeopardize states’ access to all $42 billion in broadband funding in President Donald Trump’s “One Big Beautiful Bill” and other legislation, rather than the narrower $500 million pot. In a statement, she said the regulation would hold funding “hostage, forcing states to choose between protecting consumers and expanding critical broadband infrastructure to rural communities.”

This issue is currently under review by the Senate parliamentarian.

GOP Sens. Marsha Blackburn of Tennessee, Josh Hawley of Missouri, Rand Paul of Kentucky and Ron Johnson of Wisconsin have been among the most ardent opponents of Cruz’s moratorium.

Blackburn sent a letter to Senate Majority Leader John Thune Wednesday outlining her opposition to the provision, according to three people familiar with the matter who were granted anonymity to discuss internal deliberations. Hawley also signed onto the letter, according to two people familiar with the push.

The letter was first reported by Punchbowl News. Cruz’s office did not immediately respond to a request for comment.

If the provision is not stripped out of the bill before it is brought to the floor for a vote, senators may propose an amendment to do it themselves. Republican and Democratic senators were discussing that possibility Thursday, according to a Democratic aide.

Most of the Senate’s 47 Democrats appear to be on board with the effort to tank Cruz’s AI provision, meaning only a handful of the chamber’s 53 Republicans would need to defect from Cruz to pass the amendment.

On former Trump aide Steve Bannon’s podcast Tuesday, Hawley vowed to remove the moratorium out of the bill. “If we can’t get it stripped out of this bill, we’ll come back with another bill on the floor that will strip it out,” he said. Paul told the Tribune Thursday that he’d support an amendment, if offered.

U.S. Sen. John Cornyn has also “been concerned” about the provision, citing uncertainty about how the new state AI law would be impacted. But he also expressed reluctance Thursday to impose any federal regulation on AI, saying that he was unsure Congress “would be able to do something that would keep up with the evolving technology.”

Americans for Responsible Innovation, a nonprofit public policy advocacy organization, has been lobbying members of Congress against the AI provision, arguing that it could violate states’ rights and weaken consumer protections. “We're likely to see new concerns — whether that's workforce concerns, or online safety — come up in the next 10 years, and we want to make sure that state legislators have the ability to respond,” said Chris MacKenzie, ARI’s vice president for communications.

With Texas’ new AI law set to go into effect in 2026, state and AI leaders are worried that the disincentive of losing federal funds would limit lawmakers’ ability to legislate the rapidly developing technology.

State Sen. Angela Paxton, R-McKinney, came out against Cruz’s provision this week, calling it “federal overreach.”

“Texas wouldn’t be able to enforce the common-sense protections to protect our kids from things like deepfake AI child pornography, and other bipartisan AI regulations that were just signed into law,” she said.

Brendan Steinhauser, CEO of the Texas-based nonprofit Alliance for Secure AI, said that states have a “compelling interest” to protect their citizens while serving as laboratories in which statutes can be tested and used as the foundation for federal regulation.

The Alliance for Secure AI is standing up a paid marketing campaign to highlight past alarm from conservative political figures, including Cruz, about artificial intelligence achieving superhuman capabilities and “going rogue.”

They plan to target conservative audiences on Fox News streaming, Newsmax and through online ads with a focus on viewers in Washington.

Proponents of the AI moratorium, however, claim that a 50-state patchwork of laws would place AI companies under unnecessary strain and regulatory burden, hindering growth and innovation. This could put U.S.-based companies at a disadvantage, they argue.

“We’re in a race with China to lead the future of artificial intelligence,” said Doug Kelly, CEO of the tech-aligned American Edge Project. “A fractured, state-by-state system will only slow us down.”

The American Innovators Network is also backing the moratorium through a lobbying effort aimed at the public and members of Congress, via engagement with Senate offices and targeted emails, calls and texts, according to a spokesperson for the pro-tech group.

But innovation isn’t the overriding priority for some AI groups.

“When you say the federal government will do nothing and the state's completely prevented from doing something, you're kind of deciding on their behalf that we're going to prioritize innovation over everything else,” said Mark Beall, the president of government affairs at the AI Policy Network. While he thinks innovation is vital to American interests, past legislation that has prioritized innovation — such as free trade agreements — “had consequences for the American people,” Beall said.

The House originally passed a stricter version of the AI moratorium that outlawed any regulation. But the Senate’s parliamentary guardrails complicated its prospects in the upper chamber.

In order to advance Trump’s bill with a 50-vote threshold — rather than the filibuster-proof 60-vote threshold normally required to advance a bill out of the Senate — the legislation must have a direct budgetary impact.

To pass this test, Cruz altered the legislation sent over by the House to condition funding on an agreement not to regulate AI, rather than simply banning such regulation.

In May, Cruz shepherded a bill through Congress requiring platforms to take down non-consensual nude images, either generated by AI or real, while making the act of sharing such photos a federal crime. Trump signed the bill into law last month.

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