Senator Ted Cruz Proposes Controversial AI Regulation Sandbox Act

Ted Cruz AI bill could let firms bribe Trump to avoid safety laws, critics warn

Critics are slamming Sen. Ted Cruz's (R-Texas) new AI policy framework, which they claim would give the White House unprecedented authority to allow Big Tech companies to make "sweetheart" deals with the Trump administration to void laws designed to protect the public from reckless AI experiments. Under the framework, Cruz calls for a "light-touch" regulatory approach to "advance American leadership" in AI and ensure that "American values" are at the heart of the world's leading technology -- not Chinese values. Unsurprisingly, the framework requires blocking "burdensome" state AI regulations, as well as foreign ones. Cruz unsuccessfully helped push for a similar decadelong moratorium on state AI laws as part of Republicans' "big beautiful" budget bill. And more recently, he lost a bid to punish states for regulating AI, ultimately voting against his own measure in the face of overwhelming bipartisan opposition. As the first step toward limiting AI regulations to prioritize innovation, Cruz announced the SANDBOX Act -- which is shorthand for "Strengthening Artificial intelligence Normalization and Diffusion By Oversight and eXperimentation." If passed, the SANDBOX Act would let AI companies apply to temporarily avoid enforcement of federal laws that could limit their testing of new AI products. As part of the application, companies would be asked to detail known risks or harms and any steps that could be taken to mitigate harms, as well as outline benefits that could outweigh harms. Each agency in charge of enforcing each law would then weigh potential harms, with enforcement to be modified based on how much of the application each agency approves. However, the White House Office of Science and Technology Policy (OSTP) would have the power to overrule decisions from independent agencies dedicated to consumer protection, alarming critics who fear AI companies could bribe officials through political donations to void laws. Ultimately, federal agencies and the OSTP could grant two-year moratoriums on enforcement of AI laws to enable AI experiments on the public, which can be renewed up to four times for a maximum of 10 years. The bill also prompts Congress to make permanent any "successful" moratoriums found to benefit the US, Cruz's one-pager said. After its passage, Cruz expects to introduce more laws to support his framework, likely paving the way for similar future moratoriums to be granted to block state laws.

AI Regulation Moratorium Idea Isn't Dead as Ted Cruz Pushes Sandbox Act

The legislation, if passed, would allow companies to apply and re-apply for exemptions to AI regulations for up to 10 years. US Senator Ted Cruz has introduced a bill, the Sandbox Act, aimed at giving companies developing AI technologies a way to bypass regulations by requesting a government waiver. According to the bill, the act would "establish a Federal regulatory sandbox program for artificial intelligence, and for other purposes." In introducing the bill, Cruz said it would allow AI tech to be unhindered by "outdated or inflexible federal rules." In addition to establishing a program for this, the bill, if passed, would allow AI companies to request a two-year waiver that could be renewed for up to 10 years. As part of that waiver applications, tech companies would need to offer details of how they'll address safety and financial risks. The proposed act comes several months after Congress removed a spending bill addition that would have blocked state AI regulations for 10 years, a measure Cruz was also behind. In the interim, there's been much debate on the role the government should take in regulating -- or not regulating -- AI technologies. In a press release related to the Sandbox Act, Cruz said the bill is about "Winning the AI race" against countries such as China. Cruz said: "Following this new AI framework can turbocharge economic activity, cut through bureaucratic red tape, and empower American AI developers while protecting human flourishing. The Sandbox Act is the first step. It embraces our nation's entrepreneurial spirit and gives AI developers the room to create while still mitigating any health or consumer risks."

Ted Cruz's new bill would let AI companies set their own rules for up to 10 years

The waivers would last for two years at a time, up to 10 years, harkening back to the failed moratorium that sought to pause all state-level AI regulation for a decade. That bill was defeated in the Senate in July. The power to grant those exceptions would rest with the federal agency whose regulations would otherwise be in effect, such as the Federal Trade Commission, which enforces current online privacy protections for children. Waivers would be automatically granted if the agency does not respond within 90 days. If rejected, the company would be able to appeal to the White House Office of Science and Technology Policy (OSTP), which would oversee the sandbox program and have the authority to override the denial. Every year, Congress would receive a report on the number of times federal rules were waived or modified.

Senator Cruz pitches two-year waiver on AI rules

We went through two hours of Senate hearings so you didn't have to Video The Trump administration is pushing to loosen federal rules on AI, with Senator Ted Cruz (R-TX) introducing legislation to give developers a two-year waiver from certain regulations, renewable for up to a decade. The snappily titled Strengthening Artificial intelligence Normalization and Diffusion By Oversight and eXperimentation [PDF] (the SANDBOX Act) would provide AI companies with a way to "seek temporary waivers or modifications of specific federal rules. Cruz launched the legislation on Wednesday, just as he was questioning the White House director of the Office of Science and Technology Policy (OSTP), Michael Kratsios, who is also Peter Thiel's former chief of staff. You can see the entire hearing below. Youtube Video Under the language of the bill, any company could apply to the OSTP Director for a two-year waiver from specific federal rules (extendable up to 10 years), with relevant agencies getting 90 days to object. Applicants must spell out the potential benefits of their systems and how they will mitigate risks to health, safety, or consumers. The OSTP would then report annually to Congress on approvals, waivers granted, and outcomes. "Under the SANDBOX Act, an AI user or developer can identify obstructive regulations and request a waiver or a modification, which the government may grant for two years via a written agreement that must include a participant's responsibility to mitigate health or consumer risks," Cruz said at the hearing. "To be clear, a regulatory sandbox is not a free pass. People creating or using AI still have to follow the same laws as everyone else." The ten-year potential waiver coincides with the administration's push for lighter AI rules. A separate Trump-backed bid to block state AI regulation for a decade was stripped from a tax-and-spend package on a 99-1 Senate vote. At the hearings, Kratsios said that he supported the bill, although it seemed unclear on the details of which agencies exactly would be making the decisions about what is acceptable or not. Federal agencies mhave 90 days to object to a waiver request; if they don't respond or seek more time, OSTP may presume no objection and proceed with a targeted waiver. "While, in 2020, the American innovation enterprise held a comfortable lead in AI over our closest competitors, by 2024 the gap had begun to close significantly and we stood in danger of losing our preeminence in this critical technology," he said. "In addition to our national nerve, President Trump has restored a spirit of confidence in our innovation enterprise with the Golden Age vision of renewed scientific rigor and technological invention for prosperity of all Americans. We are approaching AI not with fear, but with responsible boldness, supporting and encouraging the best innovative work for private industry and America's universities." One thing Kratsios, and several others from the Senate panel were keen on, was making sure that either free speech or woke speech was regulated - depending on which side of the political boundaries people were on. He repeatedly cited President Trump's anti-woke AI executive order to ensure AI-generated text wasn't left-leaning. This was a point Senator Eric Schmitt (R-MO) went on about in his questions. Schmitt claimed that ChatGPT responses were poisoning users' minds with a woke mind virus, saying that when the bot was asked, "is God real," it responded with "no." We checked as he was speaking and saw a more nuanced answer. Senator Jacky Rosen (D-NV) pointed out that free speech is a double-edged sword. She reminded the audience that Elon Musk's Grok engine had promoted antisemitic propaganda and that its political views were being manipulated. Kratsios said that "truth seeking" should be a priority. Rosen, who earned an associate's degree in computing and IT, said that monitoring needs to be two-sided to ensure information is correct. She also questioned if fiber programs from the US government that were cut since Trump took office would hamper AI adoption. Kratsios acknowledged that fiber was important, but said that there were other routes for connectivity, although he didn't explain how they could handle the data loads required. And then there was the question of energy. Senator Ed Markey (D-MA) claimed that AI datacenter power demands were driving the electricity bill for his constituents up 25 percent. Kratsios said that he does not "believe there's been an administration in American history more committed to growing power generation," although presumably not via solar, wind, or other renewables. ®

Key GOP Senator Opens AI Regulation Debate Urging a Light Touch

Republican Senator Ted Cruz kicked off a debate over artificial intelligence policy by proposing legislation to enshrine a "light-touch" approach to regulating the emerging technology. Cruz, who heads the powerful Commerce Committee, laid out a plan that echoes President Donald Trump's executive orders on AI, focused on outperforming China in developing the technology by adopting hands-off, minimal regulation. Tech companies like Meta Platforms Inc., OpenAI, and Microsoft Corp., have embraced the approach.

US Senator Cruz proposes AI "sandbox" to ease regulations on tech companies.

Sept 10 (Reuters) - Republican U.S. Senator Ted Cruz introduced a bill on Wednesday that would let artificial intelligence companies apply for exemptions to federal regulation to help them experiment in developing new technology. Cruz leads the Senate Commerce Committee, which is scheduled to hold a subcommittee hearing on Wednesday about ways Congress can lower regulatory hurdles for the tech industry to give U.S. companies a boost in competing with China. "A regulatory sandbox is not a free pass. People creating or using AI still have to follow the same laws as everyone else," Cruz said at the hearing. If passed by Congress, the bill would allow agencies that oversee federal regulations to consider applications from companies to be exempt from regulations for two years at a time, and require companies to outline the potential safety and financial risks and how they would mitigate them. Consumer rights advocacy group Public Citizen raised concerns about provisions in the proposal that would allow the White House's Office of Science and Technology Policy to override decisions by agency heads, and said the proposal "treats Americans as test subjects." "The sob stories of AI companies being 'held back' by regulation are simply not true and the record company valuations show it," said J.B. Branch, Public Citizen's Big Tech accountability advocate. Cruz's sandbox bill does not include a ban on state regulation, something that the tech industry has sought and the White House has said is necessary to boost innovation. A bid to put a ban in place as part of President Donald Trump's tax-and-spending bill was defeated in the Senate on a 99-1 vote in July. OSTP Director Michael Kratsios said at the hearing that Congress should reconsider the issue. "It's something that my office wants to work very closely with you on," he told Cruz at the hearing. Reporting by Jody Godoy in New York; Editing by Franklin Paul and David Gregorio Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence * Data Privacy * Public Policy Jody Godoy Thomson Reuters Jody Godoy reports on tech policy and antitrust enforcement, including how regulators are responding to the rise of AI. Reach her at [email protected]

Sen. Cruz introduces bill to reduce regulatory burden facing AI companies

U.S. Senator Ted Cruz (R-TX) speaks during a press conference at the U.S. Embassy, in Mexico City, Mexico, Aug. 29, 2025. A new bill from Senate Commerce Chair Ted Cruz, R-Texas, would take a step toward regulating artificial intelligence when it comes to the ability for companies to develop new services. The proposal would require the federal government to create a contained and secure testing area for AI software, known as a regulatory sandbox. Companies would be able to apply to join through the White House Office of Science and Technology Policy. Cruz's effort underscores a concern among many lawmakers that the U.S. will fall behind in AI, particularly to China, if regulations aren't loosened to allow for more and faster innovation. With the sandboxing proposal, companies could identify regulations that are obstructing their efforts, and ask for a waiver. For example, a company developing cancer-screening software could show why it needs modifications to Health Insurance Portability and Accountability Act, or HIPAA, regulations in order to test its product. The company could work with the government to determine if a waiver could be granted without violating standards such as patient privacy, safety and consumer protection. The government would be able to grant waivers for two-year periods for up to 10 years. After 12 years the program would sunset. Cruz is positioning AI as a top priority in the committee, with a focus on enshrining parts of the Trump administration's AI Action Plan into law. The committee is scheduled to hold a hearing Wednesday with Michael Kratsios, director of the White House OSTP. Cruz said in a statement to CNBC that the executive order alone won't be sufficient to keep the U.S. as a leader in AI development and deployment, and that the bill would help spur innovation. "Following this new AI framework can turbocharge economic activity, cut through bureaucratic red tape, and empower American AI developers while protecting human flourishing," he said. According to a five-pillar plan shared with CNBC, Cruz also aims to create federal standards for AI, prevent AI from being used in harmful ways such as scams, allow free speech and address ethical concerns. Sandboxes are already in use in other countries such as Singapore, Brazil and France. While Cruz is still working to get Democratic sponsors for his bill, the issue has support from across the aisle. A bipartisan group of lawmakers introduced a separate regulatory sandboxing bill focused on AI use in the financial sector.

Ted Cruz Wants to Help AI Companies Duck Regulations

Most tech firms like to operate under the adage of "ask forgiveness, not permission," but they don't even have to do that when they have lenient overseers like Ted Cruz trying to preemptively tell them to go ahead and get reckless. According to a report from Bloomberg, the Texas Senator plans to introduce legislation that will waive federal regulations for artificial intelligence companies and allow them to test new products without the standard scrutiny or oversight. The proposed bill, which is still being drafted and has not yet been introduced, would reportedly allow AI firms to apply for a two-year waiver that would protect them from having to comply with any “enforcement, licensing, or authorization†requirements from the federal government. Instead, they'd operate in what Bloomberg calls a "regulatory sandbox" that would be operated by the White House’s science and technology office, which is currently headed by Michael Kratsios, the former managing director and head of strategy for Scale AI. So, you know, don't expect much in terms of crackdowns. In addition to the two-year hall pass, companies would reportedly be able to apply for eight more years of freedom. That would be a total of 10 years of unregulated development, which is in line with the previously proposed 10-year ban on state-level regulations that would govern how companies can operate. That proposal, which was initially part of the One Big, Beautiful Bill but eventually got voted down by a 99-1 count, was also brought by Cruz. It's enough to give you the sense that maybe the Senator really wants to axe those guardrails. While it's not clear yet what provisions will make it to the final copy of the bill, Bloomberg reported the expectation is that Cruz will introduce the proposal on Wednesday while Kratsios is testifying before the Senate. If he does, it'll make good on something he's been promising AI firms for months. He first floated the idea of a "light touch†approach to AI regulations back in May, and Politico first reported on this expected piece of legislation last month. Whether it passes will likely depend on whether Republicans have remained skeptical enough of the technology to not fully strip away the ability to regulate it, though the fact that they let states retain their rights to pass AI-related laws might make it more likely that they sign on to letting the federal rules get lax.

US Senator Cruz proposes AI "sandbox" to lift regulations

Sept 10 (Reuters) - Republican U.S. Senator Ted Cruz introduced a bill on Wednesday that would let artificial intelligence companies apply for exemptions to federal regulation to help them experiment in developing new technology. Cruz leads the Senate Commerce Committee, which is scheduled to hold a subcommittee hearing on Wednesday about ways Congress can lower regulatory hurdles for the tech industry to give U.S. companies a boost in competing with China. The sandbox bill "embraces our nation's entrepreneurial spirit and gives AI developers the room to create while still mitigating any health or consumer risks," Cruz said in a statement. If passed by Congress, the bill would allow agencies that oversee federal regulations to consider applications from companies to be exempt from regulations for two years at a time, and require companies to outline the potential safety and financial risks and how they would mitigate them. Reporting by Jody Godoy in New York, Editing by Franklin Paul Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence * Data Privacy * Public Policy Jody Godoy Thomson Reuters Jody Godoy reports on tech policy and antitrust enforcement, including how regulators are responding to the rise of AI. Reach her at [email protected]

Cruz says AI rule moratorium 'not dead at all'

Sen. Ted Cruz (R-Texas) said Tuesday that a provision seeking to bar states from regulating artificial intelligence (AI) is "not at all dead," despite being stripped from President Trump's tax and spending bill earlier this year. "It's not at all dead," he told Politico's Rachel Bade, adding, "In the course of that bill, I was privileged as chairman of the Commerce Committee to write major portions of that bill. And I gotta say, we won virtually every battle. We had about 20 battles, and I think we won 19. So I feel pretty good." Cruz pushed to keep the AI moratorium, which sought to restrict states from regulating the technology for 10 years, in Trump's "big, beautiful bill." However, he was ultimately among the 99 senators who voted to strip the measure from the legislation after a deal with Sen. Marsha Blackburn (R-Tenn.) fell apart. Their short-lived agreement reduced the moratorium to five years and featured some exceptions for kids' online safety and publicity rights. Despite initially clearing the House, the provision was also facing vocal pushback from Rep. Marjorie Taylor Greene (R-Ga.), who threatened to withhold her vote for the legislation if the AI moratorium remained. Cruz introduced new AI legislation last week, known as the SANDBOX Act, which would allow companies to apply for waivers for regulations that they argue impede their ability to experiment with the technology. The bill comes as part of a broader AI framework put forward by the Senate Commerce chair, who argues his proposal could "turbocharge economic activity, cut through bureaucratic red tape, and empower American AI developers while protecting human flourishing."

US Senator Cruz Proposes AI 'Sandbox' to Lift Regulations

(Reuters) -Republican U.S. Senator Ted Cruz introduced a bill on Wednesday that would let artificial intelligence companies apply for exemptions to federal regulation to help them experiment in developing new technology. Cruz leads the Senate Commerce Committee, which is scheduled to hold a subcommittee hearing on Wednesday about ways Congress can lower regulatory hurdles for the tech industry to give U.S. companies a boost in competing with China. The sandbox bill "embraces our nation's entrepreneurial spirit and gives AI developers the room to create while still mitigating any health or consumer risks," Cruz said in a statement. If passed by Congress, the bill would allow agencies that oversee federal regulations to consider applications from companies to be exempt from regulations for two years at a time, and require companies to outline the potential safety and financial risks and how they would mitigate them. (Reporting by Jody Godoy in New York)

US Senator Cruz proposes AI 'sandbox' to ease regulations on tech companies - The Economic Times

Republican US Senator Ted Cruz introduced a bill on Wednesday that would let artificial intelligence companies apply for exemptions from federal regulation to help them experiment in developing new technology. Cruz leads the Senate Commerce Committee, which is scheduled to hold a subcommittee hearing on Wednesday about ways Congress can lower regulatory hurdles for the tech industry to give US companies a boost in competing with China. "A regulatory sandbox is not a free pass. People creating or using AI still have to follow the same laws as everyone else," Cruz said at the hearing. If passed by Congress, the bill would allow agencies that oversee federal regulations to consider applications from companies to be exempt from regulations for two years at a time, and require companies to outline the potential safety and financial risks and how they would mitigate them. Leading AI companies including OpenAI, Alphabet's Google and Meta Platforms have called on the Trump administration to lower regulatory barriers for AI development, and the White House's Office of Science and Technology Policy has said it will gather public comment on what regulations pose hurdles to the industry. Federal regulators oversee rules meant to ensure health data privacy, transportation safety, financial market stability and more. Consumer rights advocacy group Public Citizen said the proposal "treats Americans as test subjects" and raised concerns about provisions in Cruz's bill that would allow OSTP to override agencies' denial of regulatory waivers. "The sob stories of AI companies being 'held back' by regulation are simply not true and the record company valuations show it," said J B Branch, Public Citizen's Big Tech accountability advocate. Cruz's sandbox bill does not include a ban on state regulation, something that the tech industry has sought and the White House has said is necessary to boost innovation. A bid to put a 10-year moratorium on state regulation in place as part of President Donald Trump's tax-and-spending bill was defeated in the Senate on a 99-1 vote in July. States have enacted a variety of laws on AI. Several states have criminalized the use of AI to generate sexually explicit images of individuals without their consent. California prohibits unauthorized deepfakes in political advertising and requires healthcare providers to notify patients when they are interacting with an AI and not a human. Colorado passed a law last year aimed at preventing AI discrimination in employment, housing, banking and other consequential consumer decisions. The tech industry has lobbied for changes to the law, and the state legislature recently pushed forward its implementation to mid-2026. "These types of very anti-innovation regulations are a huge problem for our industry," OSTP director Michael Kratsios said at the hearing, adding that Congress should revisit the possibility of preempting state laws. "It's something that my office wants to work very closely with you on," he told Cruz at the hearing.

Cruz Proposes AI 'Sandbox' Bill to Ease Federal Rules | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. Cruz, who chairs the Senate Commerce Committee, introduced the measure ahead of a subcommittee hearing focused on reducing barriers for the technology sector as it competes with China. During the hearing, Cruz emphasized that the legislation does not amount to a blanket waiver. "A regulatory sandbox is not a free pass. People creating or using AI still have to follow the same laws as everyone else," he said, per Reuters. If enacted, the bill would permit federal agencies overseeing regulations to consider exemption applications from AI firms for two years at a time. Companies would be required to outline potential financial and safety risks, as well as plans to mitigate them, according to Reuters. Read more: The Case for Commodification: AI Agents The proposal has sparked pushback from consumer advocacy groups. Public Citizen warned that provisions granting the White House's Office of Science and Technology Policy authority to overrule agency decisions could put Americans at risk. The group argued the bill effectively treats citizens as "test subjects." J.B. Branch, Public Citizen's Big Tech accountability advocate, criticized the legislation, saying, "The sob stories of AI companies being 'held back' by regulation are simply not true and the record company valuations show it." Notably, the bill omits a prohibition on state-level regulation -- an element that technology lobbyists have pushed for and the White House has said would spur innovation. A prior attempt to enact such a ban, included in a broader Trump-era spending measure, was overwhelmingly rejected in the Senate with a 99-1 vote in July, Reuters reported. During the hearing, Michael Kratsios, Director of the White House Office of Science and Technology Policy, urged lawmakers to revisit the matter, telling Cruz, "It's something that my office wants to work very closely with you on."

US Senator Cruz proposes AI "sandbox" to ease regulations on tech companies

(Reuters) - Republican U.S. Senator Ted Cruz introduced a bill on Wednesday that would let artificial intelligence companies apply for exemptions to federal regulation to help them experiment in developing new technology. Cruz leads the Senate Commerce Committee, which is scheduled to hold a subcommittee hearing on Wednesday about ways Congress can lower regulatory hurdles for the tech industry to give U.S. companies a boost in competing with China. "A regulatory sandbox is not a free pass. People creating or using AI still have to follow the same laws as everyone else," Cruz said at the hearing. If passed by Congress, the bill would allow agencies that oversee federal regulations to consider applications from companies to be exempt from regulations for two years at a time, and require companies to outline the potential safety and financial risks and how they would mitigate them. Consumer rights advocacy group Public Citizen raised concerns about provisions in the proposal that would allow the White House's Office of Science and Technology Policy to override decisions by agency heads, and said the proposal "treats Americans as test subjects." "The sob stories of AI companies being 'held back' by regulation are simply not true and the record company valuations show it," said J.B. Branch, Public Citizen's Big Tech accountability advocate. Cruz's sandbox bill does not include a ban on state regulation, something that the tech industry has sought and the White House has said is necessary to boost innovation. A bid to put a ban in place as part of President Donald Trump's tax-and-spending bill was defeated in the Senate on a 99-1 vote in July. OSTP Director Michael Kratsios said at the hearing that Congress should reconsider the issue. "It's something that my office wants to work very closely with you on," he told Cruz at the hearing. (Reporting by Jody Godoy in New York; Editing by Franklin Paul and David Gregorio)

US Senator Cruz proposes AI "sandbox" to lift regulations

(Reuters) -Republican U.S. Senator Ted Cruz introduced a bill on Wednesday that would let artificial intelligence companies apply for exemptions to federal regulation to help them experiment in developing new technology. Cruz leads the Senate Commerce Committee, which is scheduled to hold a subcommittee hearing on Wednesday about ways Congress can lower regulatory hurdles for the tech industry to give U.S. companies a boost in competing with China. The sandbox bill "embraces our nation's entrepreneurial spirit and gives AI developers the room to create while still mitigating any health or consumer risks," Cruz said in a statement. If passed by Congress, the bill would allow agencies that oversee federal regulations to consider applications from companies to be exempt from regulations for two years at a time, and require companies to outline the potential safety and financial risks and how they would mitigate them. (Reporting by Jody Godoy in New York)