Cruz Proposes AI Sandbox to Ease Federal Oversight Rules

Cruz Pushes AI Sandbox Bill to Loosen Federal Rules for Tech Firms

Written by Aaron S.,

Editor-In-Chief

Last Updated: September 10, 2025

Key Takeaways

Cruz’s bill would let AI companies apply for two-year rule waivers to test new systems, with required safety and risk explanations;
The proposal does not block state-level AI laws, despite industry efforts to limit them, but local rules would still apply;
The White House is reviewing federal rules on AI, while OSTP warns that certain state laws may hurt innovation.

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Senator Ted Cruz has introduced a new bill that would give artificial intelligence (AI) companies the option to request temporary relief from certain federal regulations.

The proposal would allow firms to test new AI technologies without immediately facing the full weight of federal oversight.

The bill outlines a process by which agencies could approve two-year waivers for companies seeking to trial new AI systems. However, applicants would need to explain any possible risks, whether related to safety or finances, and how they plan to reduce or control those risks.

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Cruz noted that this is not meant to let companies ignore the law, yet existing legal responsibilities still apply.

Several leading AI developers, including OpenAI, Google, and Meta, have requested that the federal government reduce the amount of red tape they face. In response, the White House Office of Science and Technology Policy (OSTP) has started reviewing which regulations are most burdensome for innovation.

One part of the bill that remains unchanged is how it handles state-level laws. Despite pressure from the tech industry to block local rules, Cruz’s proposal does not override existing state laws.

At the Senate hearing, OSTP Director Michael Kratsios said certain state laws could harm innovation and called on Congress to consider stronger federal rules that apply nationwide. He expressed support for working closely with lawmakers to address the issue.

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