Senate GOP leaders have revised their proposed tax measure with a new twist: they’re now tying federal broadband funding to state-level AI regulation. Under the updated plan, any state that tries to pass its own rules on AI could lose access to money for broadband projects. This marks a shift from the House’s earlier version, which outright blocked states from creating any AI-related regulations for the next ten years.
Senator Ted Cruz, who heads the Senate Commerce Committee, framed the changes as part of a broader push to unlock America’s economic potential and ensure national security. In his words, the provisions reflect promises made to voters by President Donald Trump and Republican lawmakers.
The proposal is already stirring up strong reactions across the political spectrum. State officials from both Republican- and Democrat-led governments are pushing back, warning that it would undermine their ability to manage new and potentially risky technologies like AI. Digital safety experts are also raising red flags, saying this approach could open the door to unchecked AI development at a time when safeguards are badly needed.
Meanwhile, top tech industry leaders—including Sam Altman from OpenAI—are lobbying hard in favor of a unified national approach. They argue that if each state implements its own set of AI rules, it could create confusion and stifle technological progress.
Even some Republicans in the House are distancing themselves from the proposal. Representative Marjorie Taylor Greene, who initially voted for the measure, later said she wasn’t aware it included the AI provision. She criticized the proposal, saying it increased federal power at the expense of states—the opposite of what she believes the GOP should stand for.
Senate GOP lawmakers are also trying to make sure the bill fits within the special budget process they’re using, which allows passage with a simple majority. That means every part of the bill must be tied directly to federal spending. By making broadband funds conditional on state behavior, GOP leaders believe they’re staying within the rules. Cruz plans to argue that point before the Senate parliamentarian, who advises on what the budget rules allow.
So far, Congress hasn’t been able to agree on a national AI regulatory framework, leaving a gap that the bill attempts to fill, though in a controversial way. Beyond AI, the legislation also includes changes to how the government auctions off spectrum for commercial wireless services. This part of the bill has also been contentious, as lawmakers debate how to balance commercial expansion with national security.
The Senate aims to vote on the tax overhaul, which includes extensions of the 2017 tax cuts and new corporate breaks, before the end of the month.
Leading tech companies like D-Wave Quantum Inc. (NYSE: QBTS) will be watching the developments in Congress in order to ascertain how any measure passed could impact their trajectories and operations.
NOTE TO INVESTORS: The latest news and updates relating to D-Wave Quantum Inc. (NYSE: QBTS) are available in the company’s newsroom at https://ibn.fm/QBTS
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