As US President Donald Trump pushes the Senate to pass his Big Beautiful Bill by a July 4th deadline – including the controversial AI moratorium on state regulation – one CISO tells Cybernews that approaching regulation with a “light touch” may be just what the AI industry needs to succeed.
With the fate of AI regulation hanging in the balance, Republicans and Democrats continue to be divided on most issues, and allowing state governments the ability to regulate artificial intelligence within their borders is most definitely one of them.
Advancing in the House budget bill last month, and now clearing the Senate over the weekend, the originally proposed “10-year federal moratorium” on state enforcement of AI legislation has been rewritten and reworked into a “temporary pause.”
Texas Senator and Chairman of the Senate Commerce Committee Ted Cruz was reported to have rewritten aspects of the proposal to pass parliamentarian muster and keep the AI moratorium in the budget bill, no easy feat considering many hardline Republicans, as well as Democrat lawmakers, are against it.
The proposal would ban “any law or regulation limiting, restricting, or otherwise regulating artificial intelligence models, artificial intelligence systems, or automated decision systems.”
According to the Cruz rewrite, if any state attempts to enforce AI regulations in the next 10 years, the federal government would be able to withhold broadband funding, which supports the expansion of broadband infrastructure to underserved areas across the nation.
Far right Republicans have argued that an imposed moratorium essentially takes away a state's right to self-govern, and ultimately will leave too much power in the hands of the big tech companies developing the bleeding edge AI technology.
Repubican Congresswoman Marjorie Taylor Greene representing Georgia has continuously spoken out against the proposal on X, even though she is a staunch Trump supporter.
“Tying our states' hands behind their back for 10 years with a moratorium freezing states' ability to regulate and make laws is the opposite of federalism and makes us no different than China with a big government power grab,” Greene said on June 9th.
Hi David, I think the AI discussion is one of the most important issues we can plan for.
undefined Rep. Marjorie Taylor Greene🇺🇸 (@RepMTG) June 9, 2025
For context of my background and conceptual framework. As a business owner in construction, I am pro business and understand the labor issues and needs better than most.
As a Representative… https://t.co/nQoPQoiueY
Meanwhile, advocates for the proposal point out that having 50 states with 50 different compliance regulations will create confusion for companies operating on a national scale, especially when it comes to enforcement across the board.
Finding the true balance
This is where the softer “temporary pause” may prove to be just what the doctor ordered, according to Kevin Kirkwood, CISO at Exabeam.
“A true balance must be achieved. States must be able to maintain their sovereignty, and the federal government should provide the strategy and framework for them to follow,” Kirkwood told Cybernews.
Examining both sides of the issue, Kirkwood says that Cruz’s approach brings up an interesting set of arguments in the case for AI regulation.
“Over-regulation of the AI industry could drive the smaller players out of the business and minimize the potential for innovation,” Kirkwood says, echoing the lawmakers who are for the proposal.
Kirwood also believes that having a variety of state laws without a unified AI governance framework will likely negatively impact AI development in the states choosing to overregulate – and make it harder for fledgling companies to do business there.
This argument is also championed by supporters of the 10-year pause who believe stifling innovation will put the US behind China on the world tech stage and put a dent in US national security.
On the other hand, Kirkwood points out if the federal government is too loose and lacks guardrails, “then it may be too late to ever put a saddle and bridle on the industry to gain a modicum of control.”
Kirkwood says this is where a so-called “light touch” comes into play. “If it is the federal government driving AI regulation with a ‘one-size-fits all' approach, then the light touch may help the United State forge ahead and gain a competitive advantage in the industry.”
This doesn't mean that the challenges of AI relating to the potential for bias, fairness, privacy, and citizens' rights should fall by the wayside, Kirkwood noted.
“All of these challenges will have to be met and resolved. While this may mean that regulation is inevitable, it must be done with the lightest touch possible and painted with the broadest brush," he added.
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