US budget bill passes without controversial block on states regulating AI
- Reference: 1751580473
- News link: https://www.theregister.co.uk/2025/07/03/trump_budget_bill_tech_impact/
- Source link:
House minority leader Hakeem Jeffries (D-NY) tried to delay a vote on the bill with a nine-hour speech but that couldn’t prevent [1]its passage in a form that contains no apparent changes that could force it back to the Senate for additional revisions. It’s now up to President Trump to sign it into law, right on time with his July 4 deadline.
The part of the bill of most interest to the tech industry was its provision for a moratorium on state-level regulation of AI, which would have rendered all AI regulation that didn't come from the federal government unenforceable for 10 years. Lawmakers re-drafted the ban to cover five years, and then with the added caveat that states could enforce their own AI rules if they were willing to give up all access to [2]rural broadband development funds available through the Broadband Equity, Access, and Deployment (BEAD) program.
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The Senate [4]killed that measure with a resounding 99-1 vote on Tuesday, leaving AI enforcement in the hands of the states.
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But there are a few other relevant bits for the tech industry.
Forrester principal analyst in the security and risk space Alla Valente pointed to increased funding for rural broadband.
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"The Senate bill adds an additional $500 million of broadband funding and broadens eligible projects to include AI infrastructure," Valente told us during a video call.
The bill also provides a potential win to Elon Musk – previously [8]spurned by the Federal Communications Commission (FCC) for BEAD funding – by requiring the program to be tech-neutral, opening it up to SpaceX's Starlink satellite internet.
"The original BEAD program prioritized fiber-optic expansion," Valente said. "Now with the 'tech-neutral' approach, companies like Starlink will be able to secure funding."
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Musk [10]came out strongly against the bill, which cuts tax incentives for buying electric vehicles, potentially impacting Tesla's already [11]declining sales .
The bill also opened up a bunch of new radio spectrum frequencies for commercial use and ordered the Federal Communications Commission to auction some of it off, so there's new opportunity there as well.
The bill grants the Department of Energy $150 million to consolidate its data and use it to develop new AI models that can enable "next-generation microelectronics that have greater capabilities beyond Moore's law while requiring lower energy consumption as well as being open source for the US scientific community's benefit."
Energy changes drain AI optimism
Laura Lin, a litigation partner at the Palo Alto office of law firm Simpson Thacher specializing in the tech space, told us clean energy incentive cuts concern some of her stakeholders.
"These are generally disfavored by the tech industry, including because of the massive energy demands of AI development and deployment," Lin said in an email to The Register .
Those cuts are numerous, with the Trump bill including the elimination of funding for things like Environmental Protection Act compliance (funding which includes IT system modernizations grants), the wholesale elimination of the Greenhouse Gas Reduction [12]Fund , cuts to emissions rebates and zero-emissions vehicle incentives, and the gutting of what the Congressional summary bill describes as "various energy programs" that seek to promote commercial and residential clean energy usage.
Lin believes the big tech takeaway from Trump's bill is that it did not introduce federal AI regulations.
"There's been growing frustration with the current patchwork of state-level rules, which tech companies that operate across multiple states see as creating bureaucratic hurdles and demanding significant compliance investments," Lin told us. "The tech industry will likely keep pushing for federal AI legislation."
[13]Trump administration's whole-government AI plans leaked on GitHub
[14]AI firms and civil society groups plead for passage of federal AI law ASAP
[15]Trump administration set to waive TikTok sell-or-die deadline for a third time
[16]US bipartisan group publishes laundry list of AI policy requests
Valente agreed that Trump's bill makes acting on federal AI regulation a hard thing for lawmakers to ignore.
"It seems like the general consensus among AI companies is that sure, some don't want any regulation, but most definitely don't want fifty different sets," Valente said.
This is a political opportunity for the White House, Valente said: Take action to regulate AI with a light touch at the federal level and you make Silicon Valley happy, while pre-empting state-level laws.
As with most things in Washington, D.C., don't expect that federal AI regulation to appear anytime soon.
"Progress on the national front is likely to be slow," said Lin. ®
Get our [17]Tech Resources
[1] https://www.congress.gov/bill/119th-congress/house-bill/1
[2] https://www.theregister.com/2023/06/26/biden_broadband_funding_states/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aGdR1l0R4C8Jofg5rQPpVQAAAQA&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.theregister.com/2025/07/01/senate_passes_trumps_big_beastly/
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aGdR1l0R4C8Jofg5rQPpVQAAAQA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aGdR1l0R4C8Jofg5rQPpVQAAAQA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aGdR1l0R4C8Jofg5rQPpVQAAAQA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2022/08/11/fcc_starlink_rural_internet/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aGdR1l0R4C8Jofg5rQPpVQAAAQA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://www.reuters.com/business/autos-transportation/elon-musk-renews-criticism-trump-spending-bill-calls-new-political-party-2025-06-30/
[11] https://www.theregister.com/2025/07/03/elon_musk_tesla_deliveries_distraction/
[12] https://www.epa.gov/greenhouse-gas-reduction-fund
[13] https://www.theregister.com/2025/06/10/trump_admin_leak_government_ai_plans/
[14] https://www.theregister.com/2024/10/23/ai_firms_and_civil_society/
[15] https://www.theregister.com/2025/06/18/trump_extends_tiktok_reprieve_again/
[16] https://www.theregister.com/2024/12/19/house_ai_policy_requests/
[17] https://whitepapers.theregister.com/
Re: Progress ?
I wouldn't go as far as to say that this was "the one thing" that killed America, but this is a particularly big bit of straw on its camel back.
Re: Progress ?
Russia isn't the winner. Putin might think so if the US is dragged down, but Russia is a lesser country than some of its former USSR vassal states and is nothing on the world stage. They were exposed in their inability to successfully invade Ukraine. Yes the west has contributed weapons but the manpower has been 100% Ukraine's and Russia's military is so pathetic they have had to conscript bodies from other countries and make a deal with NK to take 10,000 cannon fodder units off their hands.
China will be the big winner from the US' downfall, though they will have their own reckoning coming over the next few decades from their demographic problem. The best possible outcome is that there is no longer ANY country that is as dominant over the world as the US has been since WW II, or Britain was during its days of Empire. That is the only way it will be in everyone's best interests to truly cooperate - once the "American exceptionalism" mind virus is dead.
Grimly predictable.
Like the New Russians, they thought making common cause with billionaires and foreign powers over their own countrymen would get them fancier shops to smash, bigger TVs to loot, and wipe the smirk off the intelligentsia's faces.
Oh well. They'll be crushed by the current setup, then throw themselves behind the next reactionary strongman (whomever Musk anoints in his "centrist" party I'll bet) who dripfeeds their tax money back to them, and then sends their kids to die in the fields of Ontario in 30 years.
Satellite should not be considered for BEAD
It is intended to build broadband INFRASTRUCTURE. Satellites are not infrastructure - they last for five years so they need to constantly be launched. Lay fiber and it'll be there for 100 years (modulo having to fix the occasional backhoe digging in the wrong spot) I'd argue that cellular companies using that money to build or upgrade towers would be a far better use than satellite, though not as good as fiber. But it is the best alternative where fiber isn't feasible (very low population density, difficult terrain, etc.)
It is probably academic, Trump will likely do something to kill BEAD since it was a Biden era program (if nothing else by firing the people who administer the funding so there's no way that money can be spent) or will rig the game against Starlink since Musk is went from Trump's best buddy to persona non grata like everyone except Elon himself knew would happen before summer started.
Re: Satellite should not be considered for BEAD
The article says AI infrastructure is also now included, so I wonder how much is now going to be spent on just hooking up new bitbarns rather than actually helping people get online.
Progress ?
Anything and everything that was progress , science , education , clean energy , every progressive measure , even healthcare for the poor has all been axed. The USA is now officially gone to the dogs. Russia won . They didn't have to fire a single bullet to see the USA being dismanteled piece by piece by their best agent Trump. China is now the world leader and that's something Americans will have to deal with. Russia 1 China 1 USA 0 .