How much AI research should be regulated is a hotly debated topic. Some experts predict that true artificial general intelligence (AGI) will create a utopia, while others warn it could be an extinction-level event. AI proponents favor deregulation to speed up the process as much as possible, while skeptics say worldwide cooperation and measured improvements are vital to avoid catastrophe.
Meanwhile, the race to improve on existing AI technology (called generative AI, or GAI) continues. There is a lot at stake, as widely adopted AI programs of any form can lead to massive wealth for their creators and an economic boost to the country where they originate.
Senator Ted Cruz is on the side of deregulation. On September 10, 2025, he proposed a bill containing his framework for giving AI tech firms more freedom from federal regulations. The Strengthening Artificial intelligence Normalization and Diffusion By Oversight and eXperimentation (SANDBOX) Act is a GOP response to a July mandate from the White House AI Action Plan, which demanded that action be taken to aid U.S. firms in the AI development battle against China. If passed, the Act would be overseen by the White House Office of Science and Technology Policy (OSTP).
The SANDBOX Act calls for two-year exemptions from federal regulations available to tech companies working with AI. It states that these freedoms will still demand accountability from the companies. The bill may face rough going in the Senate, where an amendment intended to quash state regulations on AI was removed from the last budget bill by a 99-1 vote.
Making Sure AI Doesn't Go MIA
If you're making it through a day in America without either using or encountering AI, you are in the minority. From chatbots trying to answer customer questions on a company website to grammar programs checking pretty much every article published online (ahem), AI has become an ingrained part of our existence.
For critics of AI, that's not necessarily a good thing. Large Language Models (LLMs) require a great deal of energy to operate, and their training necessitates a non-stop stream of data that may or may not be ethical (or legal). Regardless of whether AI ever reaches AGI status, it's destined to be an important part of our everyday world. With that in mind, the Trump administration wants to give U.S. tech firms a boost.
An attempt to add a provision to the budget bill passed in July 2025 that would have given AI firms a 10-year federal moratorium on state regulations was resoundingly defeated in the Senate by a 99-1 count. Only Senator Thom Tillis voted for its passage. Passage of the SANDBOX Act as written wouldn't overrule state regulations, but the OSTP would have a great deal of latitude in easing federal regulations.
Would Deregulation Upend Current Protections?
Despite the Trump administration's prodding, the SANDBOX Act faces an uncertain road in the Senate. There are concerns about AI and its potential role in weakening online safety for children, exposing private data, and providing easier paths for criminals to exploit AI.
For example, some states have AI-related protections in place that might clash with relaxed federal regulations. If your healthcare provider uses chatbots, California law requires the companies to let you know when you're not speaking to a human. The state also bans AI-created fake images from being used in political advertising.
The Take It Down Act is a federal law Senator Cruz co-sponsored. It makes it a crime to create sexually explicit images of someone using AI and post them online. It also requires social media companies to take down those images within 48 hours. If the Sandbox Act passes, would social media companies get waivers to avoid this key provision in a law passed just this year?
Cruz and the Trump administration argue the SANDBOX Act is needed to empower American AI innovation and entrepreneurship by cutting through bureaucracy, but it comes at a time when corporate interest in AI products may be waning. With GOP control of both houses of Congress, the SANDBOX Act (or some similar deregulation) may have enough support to get passed. About the only thing that's clear is that laws and regulations surrounding AI will continue to be evaluated, changed, and argued about for some time.
Related Resources
- Federalism and the U.S. Constitution (FindLaw's U.S. Constitution)
- Haven't Started Using AI Yet? You're Not as Behind as You Might Think. (FindLaw's Practice of Law)
- Cloud Computing and the Law: The Basics (FindLaw's Legal Technology)
