The House Energy and Commerce Committee passed their reconciliation bill, including a ten-year prohibition on state AI legislation. The provision is expected to be challenged under the Byrd Rule, which requires reconciliation provisions have a significant federal spending or revenue impact. Senator Ted Cruz (R-TX) said he is considering adding the moratorium to his pending AI bill.

While in the Middle East, President Trump announced the United States signed an agreement for the United Arab Emirates to build large AI facilities with access to U.S. advanced AI chips. Additional announcements included Saudi Arabian investments in AI data centers in the U.S.

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Congress

Hearings

• Last week
  • On May 14, the Senate Judiciary Intellectual Property Subcommittee will hold a hearing on Foreign Threats to American Innovation and Economic Leadership.
  • On May 15, the House Homeland Security Cybersecurity and Infrastructure Protection Subcommittee will hold a hearing on In Defense of Defensive Measures: Reauthorizing Cybersecurity Information Sharing Activities that Underpin U.S. National Cyber Defense.
  • On May 16, the House Armed Services Cyber, Information Technology, and Innovation Subcommittee will hold a hearing on FY2026 Review of the Department of Defense’s Cyber Posture.
• This week
  • On May 20, the House Science, Space and Technology Environment Subcommittee will hold a hearing on Innovations in Agrichemicals: AI’s Hidden Formula Driving Efficiency.
  • On May 21, the House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade will hold a hearing on AI Regulation and the Future of U.S. Leadership.
  • On May 21, the Senate Judiciary Privacy, Technology, and the Law Subcommittee holds a hearing on The Good, the Bad, and the Ugly: AI-Generated Deepfakes in 2025.

Legislation

• Energy and Commerce reconciliation bill moratorium “no state or political subdivision may enforce any law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems during the 10-year period beginning on the date of the enactment of this Act.”  (Summary)

• Sens. Elizabeth Warren (D-MA) and Eric Schmitt (R-MO) and Reps. Sara Jacobs (D-CA), Pat Fallon (R-TX), and Chris Deluzio (D-PA) introduced the Protecting AI and Cloud Competition in Defense Act to ensure that the Department of Defense (DOD)’s contracting for artificial intelligence and cloud computing tools prioritizes resiliency and competition. (House text)(House press release)(Senate text)(Senate summary)(Senate press release)

• Senate Judiciary Committee Chair Chuck Grassley (R-IA) and Sens. Chris Coons (D-DE), Marsha Blackburn (R-TN), Amy Klobuchar (D-MN), Josh Hawley (R-MO) and Brian Schatz (D-HI) introduced the Artificial Intelligence (AI) Whistleblower Protection Act to provide explicit whistleblower protections to those developing and deploying AI.  Reps. Jay Obernolte (R-CA) and Ted Lieu (D-CA) will introduce companion legislation in the House. (Text)(Press release)

• Sen. Jim Banks (R-IN) introduced the Preventing PLA Acquisition of U.S. Technology Act to prohibit U.S. agencies, federally funded schools, and federally supported companies from collaborating with Chinese military-linked entities on sensitive technologies, especially dual-use technologies like AI, semiconductors, biotechnology, quantum computing, and aerospace. (Text)(Press release)

• Sens. Jim Risch (R-ID) and Ben Ray Luján (D-NM) introduced the Testing and Evaluation Systems for Trusted Artificial Intelligence (TEST) AI Act to codify collaboration between NIST and DOE to evaluate AI models; improve public-private partnerships through an AI Testing Working Group to develop standards for performance, reliability, security, privacy, and bias; and create a public strategy for testing and the construction of testbeds, and a report to Congress on the results and recommendations for future standards development. (Press release)

• Reps. Bill Huizenga (R-MI), Bill Foster (D-IL), John Moolenaar (R-MI), Raja Krishnamoorthi (D-IL), Rick Crawford (R-AR), Josh Gottheimer (D-NJ), House Intelligence Committee Member Darin LaHood (R-IL), and Ted Lieu (D-CA) introduced the Chip Security Act to require advanced chip manufacturers to implement technical security measures to detect and prevent smuggling to unauthorized countries and end-users. Sen. Tom Cotton (R-AR) introduced the Senate companion. (Text)(Press release)

• Reps. Adriano Espaillat (D-NY, Yvette Clarke (D-NY), and Ted Lieu (D-CA) introduced the Artificial Intelligence Literacy and Inclusion Act to close the AI literacy gap among Latino, Black, AAPI, and underserved populations and would direct the National Science Foundation (NSF) to provide grant funding awards to K-12 schools, nonprofits, and other organizations to promote AI literacy and foster inclusive participation. In association with the bill, the sponsors hosted a Tri-Caucus Congressional AI Leadership Roundtable: Looking Ahead 2025non ensuring equitable access, AI literacy, education, and opportunity as artificial intelligence rapidly transforms the global economy. (Text)(Press release)

Correspondence

• Sens. Elizabeth Warren (D-MA) and Chris Van Hollen (D-MD) sent a letter to President Trump expressing concern over the President’s trip to the Middle East and approval of sales of U.S. AI chips to a United Arab Emirates-connected firm with ties to China. (Letter)(Press release)

Publications

• Rep. Rich McCormick (R-GA) published an op-ed in the Washington Examiner on Don’t let AI slip away: Why US policy must match innovation. (Op-ed)

Trump Administration

White House

• The White House released a series of fact sheets detailing investment deals, including AI-related investments, throughout the Middle East. Announcements included “Saudi Arabian DataVolt is moving forward with plans to invest $20 billion in AI data centers and energy infrastructure in the United States” and a $1.4 billion agreement that includes the “UAE committing to invest in, build, or finance U.S. data centers that are at least as large and as powerful as those in the UAE.” (Saudi Arabia fact sheet) (UAE fact sheet)

Department of Commerce

• The Bureau of Industry and Security at the Department of Commerce initiated the rescission of the Biden Administration’s AI Diffusion Rule and issued guidance on risks and consequences of the use of U.S. chips to train Chinese AI models or using Chinese-manufactured chips. (Guidance PRC computing), (Guidance U.S. AI chips) (Guidance protect U.S. supply chains)(Press release)

U.S. Copyright Office

• The U.S. Copyright Office released a pre-publication version of a report on the use of copyrighted works in the development of generative AI systems, advising the use of copyrighted works to train AI systems may not be protected by U.S. copyright law. (Report) President Trump reportedly fired the head of the Copyright Office shortly after the report’s release. (Reuters)

National Science Foundation (NSF)

• On June 2 – 4, NSF will hold a Review Panel for Computing & Communication Foundations to provide advice and recommendations on the progress of the TILOS AI Institute and to conduct a renewal review. (Notice)

Noteworthy Quotes and Events

ADMINISTRATION

Department of Commerce

• Regarding instructing BIS enforcement officials not to enforce the Biden Administration AI Diffusion Rule, Under Secretary of Commerce for Industry and Security Jeffery Kessler said, “The Trump Administration will pursue a bold, inclusive strategy to American AI technology with trusted foreign countries around the world, while keeping the technology out of the hands of our adversaries.  At the same time, we reject the Biden Administration’s attempt to impose its own ill-conceived and counterproductive AI policies on the American people.” (Press release)

CONGRESS

State AI Legislation Moratorium

• Rep. Gus Bilirakis (R-FL) issued a press release stating the Congressman “spearheaded a measure included in the package that would implement a 10-year moratorium on state and local regulation of AI models.  This moratorium will prevent the failures we have seen from the state-based regulatory morass on internet privacy from infecting the budding AI marketplace led by the United States.” Bilirakis is quoted, “Harnessing the potential of AI is not just an opportunity for the United States, it’s an absolute necessity to secure economic leadership, strengthen national security, and ensure that American values shape the future of this transformative technology. We must prevent a fragmented patchwork of rules from each state that could stifle innovation, confuse compliance, and undermine the creation of effective, nationwide standards that protect both progress and the public.  The moratorium included in this package enables us to achieve that goal.” (Press release)

• Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade Ranking Member Jan Schakowsky (D-IL) said, “The Republicans’ 10-year ban on the enforcement of state laws protecting consumers from potential dangers of new artificial intelligence systems gives Big Tech free reign to take advantage of children and families.  It is a giant gift to Big Tech and once again shows that Republicans care more about profits than people. This ban will allow AI companies to ignore consumer privacy protections, let deepfakes spread, and allow companies to profile and deceive consumers using AI. After stopping comprehensive national privacy from passing last year, Republicans are going after states and leaving consumers unprotected online.” (Press release)

• Rep. Lori Trahan (D-MA) said, “A ban on state regulations of AI for ten years shows where Republicans’ loyalty is: to Big Tech and the wealthy. Dismantling states’ regulations on technology amounts to a financial windfall of epic proportions, consistent with tax cuts for the rich that the Ways & Means Republicans marked up today,” Congresswoman Trahan said. “This provision absolves companies of any responsibility to protect consumers from the harms of AI. It is also drafted so broadly as to implicate states’ privacy and online safety laws, directly harming our kids.” (Press release)

• Regarding his pending AI bill and the possibility of included a similar measure to the House Energy and Commerce moratorium on state AI legislation, Sen. Ted Cruz (R-TX) said, “One component of that [AI] legislation will be a very similar regulatory moratorium to the one that the House adopted. The policy is sound policy.” (Politico)

• Rep. Kim Schrier (D-WA) tweeted, “We just passed midnight here at the EnergyCommerce markup, and we have STILL not spoken about health care. Instead, Republicans are prioritizing their dangerous, absurd attempt to deregulate artificial intelligence.”

• Rep. Yvette Clarke (D-NY) tweeted, “Under the guise of night, my Republican colleagues are suggesting a 10-year ban on state AI laws. 2035, are you kidding me? China, Russia, and our other adversaries aren’t waiting until 2035. They are deploying weapons against us, and we are not protected as a nation. I do not and will not support this bill.”

• Rep. Doris Matsui (D-CA) tweeted, “Republicans are trying to hide a provision in this bill that would put a moratorium on states passing AI safeguards. California not only has been an engine of AI innovation, but my state has also been a national leader in ensuring we balance innovation and competition with transparency and common-sense safeguards. To stall any state or local legislative progress on artificial intelligence, for a decade, is a slap in the face to American consumers.”

• Sen. Ed Markey (D-MA) tweeted, “The Republican 10-year moratorium on state AI regulation won’t lead to an AI Golden Age. It will lead to a Dark Age for the environment, our children, and marginalized communities.”

Trump Middle East Trip

• Sen. Mike Rounds (R-SD) said, “We’d prefer [AI companies] to be working with our standards than with Chinese standards.” (Politico)

• Sens. Mark Warner (D-VA), Chris Coons (D-DE), Jeanne Shaheen (D-NH), Jack Reed (D-RI), and Mark Kelly (D-AZ), and Reps. Jim Himes (D-CT) and Raja Krishnamoorthi (D-IL) issued a statement regarding President Trump’s artificial intelligence deals that were announced with the United Arab Emirates and Saudi Arabia, saying, “Proponents of the deal argue that China will fill the gap if we do not sell substantial quantities of advanced chips to these countries. This is false. China cannot and will not because China makes fewer chips as a nation than these deals offer, and each is inferior to their U.S.-designed equivalent. This is thanks to the bipartisan efforts under both the Trump and Biden administrations to cut off China’s access to advanced chip manufacturing equipment. These efforts have worked, and we should double down on this success rather than squander the leverage we have won. If this deal succeeds, the offshoring of frontier American AI will be recorded as an historic American blunder. People around the world deserve to enjoy the benefits we will reap from AI. However, AI chips must only be exported to trusted companies, in reasonable numbers, and in concert with credible security standards and assurances. We welcome the opportunity to work with the administration to meet these objectives and urge our colleagues in Congress to do the same.” (Press release)

Miscellaneous

• In his opening statement on foreign threats to American innovation and economic leadership, Subcommittee on Intellectual Property Ranking Member Adam Schiff (D-CA) said, “America’s leading tech companies must be confident that they can innovate without worrying about their trade secrets being stolen by foreign competitors – especially companies that are developing artificial intelligence models that are so important to our national security. When companies abroad steal detailed information about American firms and innovations, and the software, model weights, chips to develop their own technology, it makes it easier to surpass us in the global race to develop AI and so many other innovations. We also know that in many cases, foreign theft of these trade secrets can pose national security risks if those secrets land in the hands of foreign governments.” (Press release)

• Rep. Darin LaHood (R-IL) tweeted, “AI is one of the most high-stakes fronts in our strategic competition with China. I’m proud to help introduce the Chip Security Act to prevent our foremost adversary from smuggling American manufactured chips. US chips can’t be used to power CCP propaganda tools, like DeepSeek.”

• Rep. Pat Fallon (R-TX) tweeted, “AI is one of the most high-stakes fronts in our strategic competition with China. I’m proud to help introduce the Chip Security Act to prevent our foremost adversary from smuggling American manufactured chips. US chips can’t be used to power CCP propaganda tools, like DeepSeek.”

• Sen. Chuck Grassley (R-IA) tweeted, “Too many ppl working in AI feel they cant speak up when something is wrong Introd bipart legislation 2day 2 ensure whistleblower protections cover those developing + deploying AI TRANSPARENCY BRINGS ACCOUNTABILITY”

• Rep. Bill Foster (D-IL) tweeted, “As Congress’ chip designer, AI programmer, and PhD physicist, I know that we have the technical tools to prevent powerful AI technology from getting into the wrong hands. That’s why I’m leading the bipartisan effort to protect our chip exports from being smuggled into China.”

• Senate Republicans tweeted, “Investing in emerging technologies not only creates high-quality jobs, it strengthens our national security. SenToddYoung’s American Innovation and Jobs Act incentivizes American companies to invest in technologies like AI, quantum computing, and robotics.”

• Sen. Amy Klobuchar (D-MN) tweeted, “President Trump fired the head of the U.S. Copyright Office after she released a report saying AI developers can’t use copyrighted material at-will in their models.   Content creators and journalists must be fairly compensated for their work.”

• Sen. Roger Wicker (R-MS) tweeted, “I applaud the Trump administration for rescinding the Biden-era AI diffusion rule, which would have hurt America’s competitiveness in the global AI race. Replacing the rule with a simpler, more targeted framework will protect American innovation and disrupt efforts by China to advance their AI capabilities. This is a direct threat to our national security, and I am pleased the Trump administration recognizes this urgency.”

• On the firing of the head of the U.S. Copyright Office, Rep. Joe Morelle (D-NY) said it was “surely no coincidence” that the firing occurred “less than a day after she refused to rubber-stamp Elon Musk’s efforts to mine troves of copyrighted works to train AI models.” (Reuters)

About Zero One Strategies

Zero One Strategies is a boutique government relations practice dedicated to navigating the complex landscape of U.S. federal policy in emerging technologies. As advancements in technology continue to outpace regulatory frameworks, Zero One Strategies aims to provide strategic guidance and bipartisan advocacy for innovators and businesses operating at the forefront of technological development.

The practice focuses on key areas such as artificial intelligence, blockchain, decentralized technologies, cybersecurity, data, and digital infrastructure, as well as the multiple policy issues impacting these sectors, including tax and financial services.

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