In a bold and controversial move, President Donald Trump’s “Big Beautiful Bill” (BBB) is making waves, not for its price tag, but for its sweeping redefinition of AI governance in the United States. The bill, recently introduced in Congress, earmarks $500 million for the AI-driven modernization of federal IT systems while stripping all 50 states of regulatory authority over artificial intelligence for a period of 10 years.
At its core, the bill establishes a federal initiative to upgrade outdated government infrastructure by utilizing commercial AI, automated decision systems, and modern cybersecurity tools. This modernization, under the Secretary of Commerce, would replace legacy systems, increase efficiency, and implement automated threat detection. These investments are, arguably, necessary. The federal government has lagged behind the private sector in digital capabilities for years.
But the real firestorm surrounds Section (c) of the bill: a 10-year moratorium on state or local regulation of AI as it relates to interstate commerce. This effectively preempts any state law that seeks to limit or govern AI models, algorithms, or automated decision systems used across state lines. California, Illinois, and New York—states that have been actively developing AI accountability laws—would see those efforts nullified.
This is not just federal oversight; it’s federal overreach.
Supporters will argue this creates a unified national framework and prevents a patchwork of conflicting state laws. In truth, AI innovation needs consistency, and tech companies have long lobbied for one-size-fits-all rules. The bill also includes a “rule of construction” that claims to preserve state laws targeting discrimination, safety, or fraud—but who decides when a law crosses from consumer protection into “regulation of AI”?
Critics, however, see this as a power grab. It centralizes regulatory authority in Washington, D.C., at a time when public trust in both AI and federal institutions is fragile. AI technologies are already being scrutinized for bias, surveillance risks, and misuse. Do we really want to kneecap local governments from addressing harms as they emerge in their communities?
Moreover, this bill reads like an open door for AI contractors and corporate lobbyists. By banning states from intervening, it gives tech companies a freer hand to deploy experimental AI systems nationwide, with minimal accountability outside of federal channels, which are often slower and more politically constrained.
In short, Trump’s BBB is a bet: that the federal government alone can guide America through the coming AI revolution. But placing all our AI eggs in one national basket—especially one shaped by political winds—may leave ordinary citizens and their states powerless when things go wrong.
Centralized efficiency may be the goal. But democratic resilience and local autonomy are the cost. The question is: are we willing to pay it?