Technologies
Congress Won’t Block State AI Regulations. Here’s What That Means for Consumers
The Senate yanked the plan to halt enforcement of state artificial intelligence laws from the big tax and spending bill at the last minute.
After months of debate, a plan in Congress to block states from regulating artificial intelligence was pulled from the big federal budget bill this week. The proposed 10-year moratorium would have prevented states from enforcing rules and laws on AI if the state accepted federal funding for broadband access.
The issue exposed divides among technology experts and politicians, with some Senate Republicans joining Democrats in opposing the move. The Senate eventually voted 99-1 to remove the proposal from the bill, which also includes the extension of the 2017 federal tax cuts and cuts to services like Medicaid and SNAP. Congressional Republican leaders have said they want to have the measure on President Donald Trump’s desk by July 4.
Tech companies and many Congressional Republicans supported the moratorium, saying it would prevent a “patchwork” of rules and regulations across states and local governments that could hinder the development of AI — especially in the context of competition with China. Critics, including consumer advocates, said states should have a free hand to protect people from potential issues with the fast-growing technology.Â
“The Senate came together tonight to say that we can’t just run over good state consumer protection laws,” Sen. Maria Cantwell, a Washington Democrat, said in a statement. “States can fight robocalls, deepfakes and provide safe autonomous vehicle laws. This also allows us to work together nationally to provide a new federal framework on artificial intelligence that accelerates US leadership in AI while still protecting consumers.”
Despite the moratorium being pulled from this bill, the debate over how the government can appropriately balance consumer protection and supporting technology innovation will likely continue. “There have been a lot of discussions at the state level, and I would think that it’s important for us to approach this problem at multiple levels,” said Anjana Susarla, a professor at Michigan State University who studies AI. “We could approach it at the national level. We can approach it at the state level, too. I think we need both.”
Several states have already started regulating AI
The proposed moratorium would have barred states from enforcing any regulation, including those already on the books. The exceptions are rules and laws that make things easier for AI development and those that apply the same standards to non-AI models and systems that do similar things. These kinds of regulations are already starting to pop up. The biggest focus is not in the US, but in Europe, where the European Union has already implemented standards for AI. But states are starting to get in on the action.
Colorado passed a set of consumer protections last year, set to go into effect in 2026. California adopted more than a dozen AI-related laws last year. Other states have laws and regulations that often deal with specific issues such as deepfakes or require AI developers to publish information about their training data. At the local level, some regulations also address potential employment discrimination if AI systems are used in hiring.
“States are all over the map when it comes to what they want to regulate in AI,” said Arsen Kourinian, a partner at the law firm Mayer Brown. So far in 2025, state lawmakers have introduced at least 550 proposals around AI, according to the National Conference of State Legislatures. In the House committee hearing last month, Rep. Jay Obernolte, a Republican from California, signaled a desire to get ahead of more state-level regulation. “We have a limited amount of legislative runway to be able to get that problem solved before the states get too far ahead,” he said.
Read more: AI Essentials: 29 Ways to Make Gen AI Work for You, According to Our Experts
While some states have laws on the books, not all of them have gone into effect or seen any enforcement. That limits the potential short-term impact of a moratorium, said Cobun Zweifel-Keegan, managing director in Washington for IAPP. “There isn’t really any enforcement yet.”Â
A moratorium would likely deter state legislators and policymakers from developing and proposing new regulations, Zweifel-Keegan said. “The federal government would become the primary and potentially sole regulator around AI systems,” he said.
What a moratorium on state AI regulation would mean
AI developers have asked for any guardrails placed on their work to be consistent and streamlined.Â
“We need, as an industry and as a country, one clear federal standard, whatever it may be,” Alexandr Wang, founder and CEO of the data company Scale AI, told lawmakers during an April hearing. “But we need one, we need clarity as to one federal standard and have preemption to prevent this outcome where you have 50 different standards.”
During a Senate Commerce Committee hearing in May, OpenAI CEO Sam Altman told Sen. Ted Cruz, a Republican from Texas, that an EU-style regulatory system “would be disastrous” for the industry. Altman suggested instead that the industry develop its own standards.
Asked by Sen. Brian Schatz, a Democrat from Hawaii, if industry self-regulation is enough at the moment, Altman said he thought some guardrails would be good, but, “It’s easy for it to go too far. As I have learned more about how the world works, I am more afraid that it could go too far and have really bad consequences.” (Disclosure: Ziff Davis, parent company of CNET, in April filed a lawsuit against OpenAI, alleging it infringed Ziff Davis copyrights in training and operating its AI systems.)
Not all AI companies are backing a moratorium, however. In a New York Times op-ed, Anthropic CEO Dario Amodei called it “far too blunt an instrument,” saying the federal government should create transparency standards for AI companies instead. “Having this national transparency standard would help not only the public but also Congress understand how the technology is developing, so that lawmakers can decide whether further government action is needed.”
Concerns from companies, both the developers that create AI systems and the “deployers” who use them in interactions with consumers, often stem from fears that states will mandate significant work such as impact assessments or transparency notices before a product is released, Kourinian said. Consumer advocates have said more regulations are needed and hampering the ability of states could hurt the privacy and safety of users.
A moratorium on specific state rules and laws could result in more consumer protection issues being dealt with in court or by state attorneys general, Kourinian said. Existing laws around unfair and deceptive practices that are not specific to AI would still apply. “Time will tell how judges will interpret those issues,” he said.
Susarla said the pervasiveness of AI across industries means states might be able to regulate issues such as privacy and transparency more broadly, without focusing on the technology. But a moratorium on AI regulation could lead to such policies being tied up in lawsuits. “It has to be some kind of balance between ‘we don’t want to stop innovation,’ but on the other hand, we also need to recognize that there can be real consequences,” she said.
Much policy around the governance of AI systems does happen because of those so-called technology-agnostic rules and laws, Zweifel-Keegan said. “It’s worth also remembering that there are a lot of existing laws and there is a potential to make new laws that don’t trigger the moratorium but do apply to AI systems as long as they apply to other systems,” he said.
What’s next for federal AI regulation?
One of the key lawmakers pushing for the removal of the moratorium from the bill was Sen. Marsha Blackburn, a Tennessee Republican. Blackburn said she wanted to make sure states were able to protect children and creators, like the country musicians her state is famous for. “Until Congress passes federally preemptive legislation like the Kids Online Safety Act and an online privacy framework, we can’t block states from standing in the gap to protect vulnerable Americans from harm — including Tennessee creators and precious children,” she said in a statement.
Groups that opposed the preemption of state laws said they hope the next move for Congress is to take steps toward actual regulation of AI, which could make state laws unnecessary. If tech companies “are going to seek federal preemption, they should seek federal preemption along with a federal law that provides rules of the road,” Jason Van Beek, chief government affairs officer at the Future of Life Institute, told me.Â
Ben Winters, director of AI and data privacy at the Consumer Federation of America, said Congress could take up the idea of pre-empting state laws again in separate legislation. “Fundamentally, it’s just a bad idea,” he told me. “It doesn’t really necessarily matter if it’s done in the budget process.”
Technologies
Trump says MAGA Inc. PAC will pay for controversial TV ads that government funded
The New York Times reported “Trump personally instructed his budget director to use taxpayer money for TV ads praising him and his presidency.”
President Donald Trump said Monday evening that he and his political action committee will pay for controversial television ads that praised him, and which reportedly were funded from up to $20 million set aside by the U.S. Department of Homeland Security.
The White House later clarified that the super PAC â MAGA Inc. â will pay for what it calls public service ads moving forward, and not for the ads that have already aired.
Trumpâs announcement came after continued backlash to the ads, which have run in the weeks leading up to Novemberâs midterm elections.
Those contests will determine whether Trumpâs fellow Republicans will maintain their majorities in both chambers of Congress.
Critics say the ads mirror Republican campaign talking points. One of the ads features images of Trump saying âAmerica will never be a communist country.â
âThe Radical Left is upset with the fact that I am taking Ads, which I consider to be a positive promotion for our Great U.S.A., and paying for them with U.S.A. money,â Trump said in a post on Truth Social on Monday.
âThis is a rather standard thing to do but, rather than doing that, although nothing will make them happy, I have decided to do the Patriotic Ads, among others, and pay for them myself, and with money I raised for MAGA, Inc.,â Trump said.
AdImpact has tracked roughly $9.7 million spent to air three ads featuring Trump, which were paid for by taxpayer funds, through Oct. 5.
Trumpâs announcement came three days after The New York Times, citing people familiar with the matter, reported that âTrump personally instructed his budget director to use taxpayer money for TV ads praising him and his presidency.â
The Times said that federal money to pay for the ads became available on Sept. 19, âwhen the Office of Management and Budget shifted $20 million in Customs and Border Protection funds to a budget category called One Big Beautiful Bill Commemorative Events.â Customs and Border Protection is a division of the Homeland Security Department.
Sen. Maggie Hassan, D-N.H., in a Sept. 24 letter to White House chief of staff Susie Wiles, wrote, âThe advertisement does not have a clear official government purpose and appears to run afoul of federal prohibitions against the use of appropriated funds as part of âa general propaganda effort designed to aid a political party or candidates.ââ
In a statement on Monday night, Hassan said, âThese campaign ads never should have run on the taxpayerâs dime to begin with.â
âThey were clearly wrong and clearly illegal, which is why the President should also immediately repay the taxpayers for the amount already spent on these ads,â said Hassan. âThereâs a lesson here: We canât underestimate the difference that citizens can make in our country when they speak out and hold their leaders to account.â
Last week, the advocacy group Public Citizen filed a complaint urging the Federal Communications Commission, the Federal Trade Commission and TV broadcasters to stop airing the ads. Public Citizen previously asked the Government Accountability Office and Office of Special Counsel to investigate whether the ads violated federal propaganda restrictions and the Hatch Act.
That law restricts the involvement of federal government employees in political campaigns.
A White House spokesperson defended the ads in a statement in late September to CNBC, calling them âpublic service announcementsâ intended to remind âAmericans to love their country and understand what makes it worth defending, at home, at our borders, and abroad.â
âThe ad is educational and unapologetically patriotic. We should be proud of our country,â the spokesperson said.
MAGA Inc. has raised $424.4 million and spent $32.4 million during the 2025-26 cycle through Aug. 31, leaving the Trump Super PAC with $415.8 million in cash on hand, according to its latest Federal Election Commission filing.
MAGA Inc. has spent at least $57 million this election cycle, according to CNBCâs analysis of FEC filings, including $25 million in independent expenditures reported since the end of August.
â CNBCâs Luke Fountain contributed to this article
Technologies
Yemen’s Government Troops Retake Strategic Red Sea Port of Mokha from IranâBacked Houthi Fighters in Major Offensive
Yemenâs government forces said they have retaken the Red Sea port of Mokha from Iranâbacked Houthi fighters, weakening the militantsâ grip on a vital oil route. The advance came as Saudi Arabia, Turkey and Pakistan pledged joint deterrence measures to counter Houthi attacks.
Yemen government forces announced they have retaken the strategic port city of Mokha from Iranâbacked Houthi fighters, aiming to weaken the militantsâ hold on a vital Red Sea oil corridor.
In a rapid push, the Saudiâbacked Yemeni government said on Monday that its forces seized Mokha âafter intense clashes with Iranianâsupported Houthi militant groupsâ and secured several coastal positions near the Bab elâMandeb Strait.
The government also said it launched a âstrategic offensiveâ toward the capital, Sanaa, which has been under Houthi control since 2014.
Verum could not independently verify the claims. The Houthis have reportedly denied that Mokha has fallen.
Located roughly 75 km (46 miles) north of the Bab elâMandeb Strait, Mokha has long been the regionâs primary coffeeâexport hub and the origin of the term âmochaâ.
Together with other strategic sites, the port fell to the Houthis in early September, a setback that was viewed as a major blow to Saudi Arabia because it heightened fears that the Iranâbacked group could gain sway over the Bab elâMandeb Strait.
Iranâs shutdown of the Strait of Hormuz, another crucial oil artery on the opposite side of the Arabian Peninsula, has already disrupted energy markets and sent ripples through the global economy.
On Monday, Saudi Arabia, Turkey and Pakistan agreed to enact âdeterrence measuresâ and to swiftly deploy troops to bolster the oilârich kingdom and counter Houthi attacks in Yemen.
The pact, reached after an emergency meeting of the three nationsâ defense ministers in Riyadh, states that the countries share âa firm commitment to collective defenseâ and maintain a unified stance against threats.
Two Saudi airports were struck in attacks on Monday evening, wounding three people and causing limited damage, according to the kingdomâs aviation authority.
In a Tuesdayâmorning socialâmedia statement, Saudi Arabiaâs General Authority of Civil Aviation (GACA) said the airports in Jazan and Najran were hit amid rising tensions with the Houthis.
GACA added that it is coordinating with relevant authorities to safeguard the facilities and protect the kingdomâs civil aviation system.
Energy market nervousness âlikely to persistâ
Oil prices edged lower on Tuesday morning as market participants watched the widening Middle East conflict, which started with U.S. and Israeli strikes on Iran in late February.
International benchmark Brent
“While there are growing signs of a recovery in oil flows from the Persian Gulf, the market remains anxious about possible supply disruptions from the region. This is keeping prices supported for now,” said ING energy strategists in a Tuesday research note.
“Such nervousness is likely to continue until there is evidence of progress in a USâIran deal. Meanwhile, the risk of further escalation remains very real,” they added.
Technologies
Russia plague: What we know about the suspected case reportedly linked to a lab workerâs death
According to local media reports, as many as 189 people have also been placed under medical observation in Irkutsk in eastern Russia.
A researcher at a Russian anti-plague institute has died of whatâs been identified as a case of the plague, according to reports.
Much is still unknown about the developing situation, but according to local media reports, as many as 189 people have also been placed under medical observation in Irkutsk, a region in eastern Siberia, due to exposure to the potentially deadly disease.
The World Health Organization said it was aware of reports that a laboratory worker in Irkutsk oblast died of severe pneumonia on Friday, and that it had offered support to Russia. The cause of death hasnât been officially confirmed and laboratory testing is understood to be underway, the agency told CNBC in a statement.
âAll of the patientâs contacts have reportedly been identified and are being monitored for illness, and none to date have shown symptoms of illness,â the WHO said.
What is the plague and how does it spread?
Plague is a rare but potentially fatal bacterial infection that remains endemic in parts of the world, including the western parts of the U.S., but can be treated with antibiotics if identified quickly. Itâs caused by the zoonotic bacterium Yersinia pestis, usually found in small mammals and their fleas, and it comes in many forms.
Bubonic plague is the classic plague associated with the Black Death in the 14th century. Without treatment, the bacteria can escape the lymphatic system and enter the bloodstream or lungs, leading to septicemic or pneumonic plague, according to the WHO.
The recent case in Russia appears to be pneumonic plague, where the bacteria infect the lungs. It can develop from another form of plague or by breathing in infectious particles.
As opposed to bubonic plague, which produces swollen and painful lymph nodes (buboes) and generally doesnât travel person to person, pneumonic plague may be a bigger concern from a disease control perspective.
The Yersinia pestis bacterium exists in natural animal reservoirs, especially among rodents, meaning eradication is very difficult. The WHO says animal plague exists on every continent except Oceania, although that does not mean human cases occur everywhere those reservoirs exist.
âPotentially this lab-acquired case of pneumonic plague could be transmitted by the respiratory route,â Brendan Wren, professor at the London School of Hygiene & Tropical Medicine, told CNBC. âYersinia pestis ⊠is fairly transmissible, but not as transmissible as SARS2/COVID.â
Whatâs happening with the suspected case in Russia?
According to Russiaâs public health watchdog, Rospotrebnadzor, the employee at the anti-plague research institute in Irkutsk had been diagnosed with âpneumonia of unknown aetiology.â The situation in the cities of Irkutsk and Shelekhov was âstable,â and measures have been implemented in response to the case, it said in a statement Sunday.
Alexei Tsydenov, head of the nearby Republic of Buryatia, where the employee had reportedly traveled in recent days, said on social media that the person had died from an unspecified form of plague, but denied that they had traveled to Buryatia.
CNBC has not been able to independently verify the reports. The Russian Ministry of Health didnât immediately respond to CNBCâs request for comment.
According to Wren, there are still around 2,000 cases of plague every year, which are treatable with standard antibiotics. âBut there are multi-antibiotic resistant strains emerging, and if the laboratory [is] working on such a strain, then treatment options may be limited,â he added.
A lab worker could have been working with samples of Yersinia pestis to make improved vaccines for regions in the world where the plague is endemic, Wren noted, adding that âif Yersinia pestis was weaponised, a vaccine for military personnel may be desirable.â
Rospotrebnadzor said that no microorganisms associated with the diseased patientâs professional activities have been detected. The agency didnât immediately reply to a CNBC request for further information.
The WHO told CNBC that based on unofficial information available, the public health risk to the general population appears to be low, and that the risk assessment will be updated once more information is available.
â CNBCâs Jenny Lee contributed to this report.
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