What effect will HR 1, the Trump administration’s “Big Beautiful Bill,” have on AI regulations?
Not as much as it seems.
Here’s our take:
The bill specifically prohibits states from enforcing laws that target AI for ten years. This would be a huge, huge setback for state-level efforts to regulate AI, such as those in Colorado and Utah (which passed AI Acts last year), along with dozens of other states actively considering new laws regulating AI.
But as Kevin Frazier and Adam Thierer at the R Street Institute describe in a great overview of the bill, significant exemptions still apply. If the bill passes, existing federal laws will still apply to AI systems, such as anti-discrimination laws in the housing, employment and financial contexts, as will FDA regulations and laws surrounding unfair, deceptive and fraudulent business practices.
What’s more, the ban will not apply to laws that are applied equally to AI and non-AI systems alike. This is a major carve out for both generative AI and agentic AI systems - arguably the future of AI adoption - because these systems are increasingly subject to the same laws that apply to humans.
When we ask an AI agent to talk to a consumer, buy an item for us, send out a marketing campaign, or drive a car for us, that agent is subject to the same laws that would govern a human being engaging in the same activity. AI agents, in short, are subject to all the laws, which apply equally to AI and non-AI systems, and therefore not subject to this ban.
This does not, of course, mean that the Big Beautiful Bill, as proposed, would not have a major impact on AI adoption and regulation - it would. But it also does not mean that, if the bill is enacted, AI would be given free rein from legal oversight.
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