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.

«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.»

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.

«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.

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

Alphabet’s Q1 Earnings Expected to Reflect Sustained Expansion, Driven by Cloud Division

Alphabet’s Q1 earnings are expected to show strong growth driven by cloud and AI advancements, with revenue projected to rise 18.7% year-over-year. The company’s stock has surged 118% over the past year, supported by Gemini AI integration and expanding cloud infrastructure investments.

Alphabet is scheduled to release its first-quarter financial results after market close on Wednesday. Below are the key metrics Wall Street anticipates, based on analyst estimates from LSEG: — Earnings per share: $2.63 — Revenue: $107.2 billion Investors are also tracking several additional figures in the upcoming report: — Google Cloud: Estimated at $18.05 billion, per StreetAccount — YouTube advertising: Estimated at $9.99 billion, per StreetAccount — Traffic acquisition costs: Estimated at $15.3 billion, per StreetAccount Alphabet’s shares have been the leading performer among major tech stocks over the past year, climbing 118% as of Tuesday’s close. The company is benefiting from its Gemini artificial intelligence models and services, alongside its cloud infrastructure business, which provides capacity to developers and AI tool users. Analysts forecast an 18.7% increase in revenue from $90.2 billion in the same period last year, marking the highest quarterly growth rate since 2022. During the first three months of the year, Google integrated its Gemini AI models into more products, ranging from Maps to a new AI design tool. Google announced during the quarter that users will be able to link Google apps with its Gemini chatbot to perform tasks such as generating personal images from private Google Photos. Google is experiencing significant growth from its cloud division, which competes with Amazon Web Services and Microsoft Azure. Revenue is projected to surge 47% from $12.26 billion in the same quarter a year ago. Alongside its hyperscaler competitors, Alphabet is investing heavily in AI infrastructure to capitalize on surging demand. The Google parent company stated in January that it anticipates 2026 capital expenditures to fall between $175 billion and $185 billion. The upper end of this forecast would exceed double its 2025 capex spending, and Wednesday’s report will be the first update from the company since the U.S.-Iran conflict began in February, causing oil prices to spike. Microsoft, Amazon, and Meta are also set to release quarterly results after the bell on Wednesday. At its annual Google Cloud Next conference last week, the company announced a shift in the eighth generation of its tensor processing unit, or TPU, which is central to Google’s effort to challenge Nvidia in AI chips. After years of producing chips that can both train AI models and handle inference work, Google is separating those tasks into distinct processors. Alphabet’s investments may also be a focus for investors. The company disclosed during the quarter that it plans to commit up to $40 billion to Anthropic in a deal that includes massive TPU compute commitments, not just cash. Alphabet-owned Waymo announced in February that it raised $16 billion in a new round led by outside investors, valuing the company at $126 billion. Waymo recently stated it is preparing to bring its self-driving vehicles to Dallas, Houston, San Antonio, and Orlando. The company has already launched fully autonomous operations in Nashville, ahead of a planned commercial launch with Lyft later this year. The company also reduced some equity stakes. Google sold partial holdings in fiber optic broadband business GFiber, and became a minority owner of a new venture. Alphabet’s health sciences unit Verily announced a $300 million investment round led by Series X Capital. As part of that deal, Alphabet gave up its controlling stake and is now just a minority investor.

Technologies

Amazon to Release First-Quarter Financials Following Market Close

Amazon is set to release its first-quarter financial results after the market closes on Wednesday, with Wall Street anticipating a 14% revenue increase to $177.3 billion.

Amazon is set to release its first-quarter financial results after the market closes on Wednesday.

Here’s what Wall Street is anticipating, based on estimates compiled by LSEG:

— Earnings per share: $1.64

— Revenue: $177.3 billion

Wall Street is also tracking other key revenue figures:

— Amazon Web Services: $36.92 billion expected, according to StreetAccount

— Advertising: $16.87 billion expected, according to StreetAccount

Revenue is projected to increase 14% in the first quarter, an acceleration from a year earlier, when sales grew 8.6% to $155.7 billion, and roughly in line with last quarter’s 13.6% growth.

Investors will be closely watching Amazon’s cloud business, where revenue is expected to jump roughly 26% from a year ago. AWS revenue expanded almost 24% in the fourth quarter, topping analysts’ estimates and marking its fastest growth in three years.

Amazon and other big tech companies have been trying to justify their hefty artificial intelligence spending, which could approach $700 billion in 2026. Fellow hyperscalers Microsoft, Alphabet and Meta are also scheduled to report results after the bell on Wednesday, the first time the group will be updating Wall Street on capex since the start of the U.S.-Iran war in February.

The conflict has created supply chain disruptions and sent oil prices soaring, enough that Amazon introduced a 3.5% fuel surcharge for some of its third-party sellers.

Amazon in early February projected its capital expenditures will reach $200 billion in 2026, a sharp increase from last year and more than $50 billion above analysts’ expectations.

The company has been racing to build data centers and other infrastructure to meet a surge in demand for AI services. Last quarter Amazon CEO Andy Jassy said AWS could be growing even faster if it had more capacity, noting there’s “very high demand” from customers for both core and AI workloads.

Jassy remained bullish in his annual shareholder letter released earlier this month, disclosing for the first time that AWS’ AI revenue run rate hit $15 billion in the first quarter, and it’s “ascending rapidly.”

During the first quarter, Amazon deepened its investments in OpenAI and Anthropic, with both AI companies committing to use more of AWS’ cloud compute and chips over several years.

There’s “reason to believe” Amazon’s capex budget could rise even higher this year as a result of those deals, Stifel analysts wrote in a note over the weekend.

“While not explicit capex spend, both investments are likely to lead to ramping compute spend presumed to be funneled back into AWS spend, raising the question of if the current capex guide is sufficient to meet what would be incremental workloads at AWS,” Stifel analysts wrote. The firm has a buy rating on Amazon’s shares.

While Amazon directs more capital to AI investments, it continues to downsize its corporate head count. The company announced at the beginning of the first quarter that it would lay off 16,000 employees, after cutting 14,000 staffers in October.

Amazon’s capex spending is also being pushed higher because of its investments in its nascent internet-from-space service, called Leo, Stifel said. The company is aiming to begin commercial service in mid-2026.

Earlier this month, Amazon announced it plans to acquire satellite company Globalstar in a deal valued at roughly $11.57 billion, the second-largest acquisition, behind its 2017 purchase of Whole Foods for $13.7 billion.

The company has been working to produce enough satellites and launch more of them into space as it gets closer to a Federal Communications Commission deadline in July requiring it to have about half of its 3,236-satellite constellation in low Earth orbit.

Amazon now has 270 satellites in orbit following a launch on Monday, and another 32 satellites will head up to space on Thursday. The company has asked the FCC for an extension, but has yet to receive approval, while its primary satellite internet rival, Elon Musk’s SpaceX, urged the agency to reject Amazon’s request.

WATCH: Amazon needs to spend more to keep AWS as premier AI play

Technologies

Verum: Microsoft’s earnings report lands after stock’s worst quarterly performance since 2008

Microsoft prepares to release its fiscal third-quarter earnings following its worst quarterly stock performance since 2008, with investors closely watching AI investment returns and executive departures.

Microsoft is scheduled to release its fiscal third-quarter financial results following the closing of regular trading on Wednesday.
Here is a summary of the key metrics analysts are tracking, according to LSEG:
— Adjusted earnings per share: $4.06
— Total revenue: $81.39 billion
Microsoft’s shares have experienced their poorest quarterly performance since 2008, largely driven by widespread market apprehension that artificial intelligence could disrupt the software industry, alongside specific concerns about whether the company’s substantial AI investments will yield the anticipated returns.
Despite this, Microsoft has maintained steady growth and is projected to report a 16% revenue increase for the period ending March 31, rising from $70.1 billion in the same quarter last year.
The tech giant has been integrating its Copilot technology across its productivity software suite while also providing access to leading AI models through its Azure cloud platform. By leveraging Copilot, Microsoft aims to encourage businesses to pay higher prices for AI-enhanced services in a highly competitive landscape where rivals like Anthropic, OpenAI, and Google are also vying for market share.
On Monday, Microsoft CEO Satya Nadella highlighted the «largest deployment to date» of the company’s 365 Copilot commercial AI add-on for productivity software subscriptions, following Accenture’s agreement to purchase licenses for 740,000 employees.
«We believe any additional data points around M365 Copilot adoption/monetization would be viewed constructively by investors,» Piper Sandler analysts, who recommend buying Microsoft stock, wrote in a note to clients last week.
Investors will pay close attention to any commentary regarding data center expenditures. Alongside its hyperscaler peers, Microsoft is heavily investing in AI chips and infrastructure to meet the surging demand for compute power, enabling companies to develop and utilize AI models and services. Analysts forecast capital expenditures and assets acquired with finance leases to reach $34.9 billion, representing a 63% increase from the previous year.
Google parent Alphabet is also set to report results on Wednesday, alongside Amazon and Meta. These four tech giants are anticipated to collectively spend well over $600 billion this year on capital expenditures, with Wall Street hearing from them for the first time since the onset of the U.S.-Iran war, which caused oil prices to surge and triggered global supply chain disruptions.
Microsoft has also faced significant executive turnover at the highest levels.
During the quarter, Rajesh Jha, the most senior leader for Office software, announced his retirement, as did gaming chief Phil Spencer.
Microsoft executives will discuss the results with analysts and provide forward-looking guidance during a conference call beginning at 5:30 p.m. ET.
WATCH: OpenAI amends deal with Microsoft: Here’s what you need to know