Five Reasons Why Critics Were Wrong About the AI Moratorium

This week, the Senate voted to remove the 10-year moratorium on enforcement of state AI laws from President Trump’s domestic spending bill, following an intense lobbying campaign by opponents of the initiative. This decision is a major setback for U.S. leadership in AI. A growing patchwork of duplicative and conflicting state AI regulations threatens to bury this nascent industry under an avalanche of European-style rules.

The vote isn’t surprising given the criticism of the moratorium—but those critiques are misguided. Congress should revisit this proposal, and it's important to set the record straight.

Claim: An AI Moratorium Means No Regulation of AI

Truth: The purpose of the moratorium is not to leave AI unregulated, but rather to ensure that regulation occurs at the federal level rather than through a fragmented state-by-state approach. Congress can, and should, create AI-specific interventions, such as guidelines for law enforcement’s use of AI or the establishment of national AI incident and vulnerability databases. In fact, Congress is already taking steps in this direction. Earlier this year, it passed the bipartisan Take It Down Act, which criminalizes the publication of “revenge porn,” including deepfakes.

Federal laws provide consistent protection for all Americans, regardless of where they live. They also allow AI developers and deployers to operate in a unified national market. Without this consistency, companies face a fractured landscape that limits their ability to scale. The absence of a digital single market is already one of the EU’s biggest barriers to innovation—U.S. lawmakers risk importing that problem by allowing states to impose conflicting digital policies.

Claim: An AI Moratorium Prevents States from Protecting Consumers

Truth: Many concerns about AI do not require AI-specific laws. For example, deepfakes used to mislead voters can be addressed with technology-neutral laws governing the use of materially deceptive media in elections. Similarly, worries about AI-enabled discrimination overlook the fact that states already prohibit discrimination with laws that apply regardless of the technology involved. A moratorium would discourage states from enacting unnecessary AI-specific laws where existing or new technology-neutral laws would suffice.

Claim: A Moratorium Should Follow Federal AI Legislation

Truth: Critics argue that Congress should only pass a moratorium after it enacts comprehensive federal AI legislation. But many of those pushing for strict AI regulation have little incentive to support such federal action. They benefit from working at the state level, where they can target sympathetic legislatures to pass the most aggressive laws and hope others follow. This creates a race to the bottom, pressuring less aggressive states to adopt similarly strict rules just to avoid regulatory fragmentation. A moratorium would level the playing field and force stakeholders to negotiate federal legislation rather than bypass it.

Claim: A 10-Year Moratorium Is Too Long

Truth: AI is advancing quickly, and policymakers should adapt accordingly—but not rush into regulation based on speculative fears. Many of today’s concerns about AI resemble past technology panics that didn’t require regulation. Poorly designed laws driven by fear rather than facts risk undermining U.S. competitiveness. A 10-year moratorium gives Congress the time to study the technology, understand its implications, and focus on real harms rather than hypothetical ones.

Claim: A Moratorium Would Hurt Disadvantaged Groups

Truth: A state-by-state regulatory approach makes it harder for underrepresented groups to influence policy. These groups must divide limited time and resources across numerous jurisdictions. It also limits policymakers’ access to technical experts, who cannot advise dozens of state governments simultaneously. Concentrating policymaking at the federal level allows for a more coordinated, evidence-based process that better serves all Americans.

While the Senate was not ready to pass the moratorium on state AI laws at this time, it is a worthwhile proposal that Congress should revisit soon. And next time, legislators will hopefully be more prepared to respond to the flawed arguments raised by critics.

Image credit for social media preview: Glenn Fawcett