Reconciliation text includes $500 million for modernization and AI at Commerce

The House Energy and Commerce Committee included $500 million for federal IT modernization and artificial intelligence in the 2025 budget reconciliation bill text set to be marked up Tuesday as Republicans work towards a final package. 

The Commerce Department would be able to use the appropriated funds to replace or update legacy business systems and deploy AI at the department through 2035. 

Also tucked inside the text is a moratorium on states and “political subdivisions” enforcing “any law or regulation” regarding AI models and systems for the next decade. States have taken different approaches to regulating AI, triggering concerns about a patchwork of AI regulation in the absence of congressional action thus far.

“A moratorium on new AI regulations will give this market time to grow and ensure American AI innovators can invest and compete against China and the rest of the world,” Adam Thierer, a senior research fellow at the R Street Institute, told Nextgov/FCW in a statement.

Commerce itself was central to the Biden administration’s since-axed executive order meant to set some guardrails in the absence of congressional action. It plays a critical role in setting AI standards via the National Institute of Standards and Technology as well as in addressing thorny questions about AI and intellectual property, as it houses the U.S. Patent and Trademark Office. 

President Donald Trump quickly repealed Biden’s executive order on AI upon taking office in January and issued his own order emphasizing AI dominance. The administration has since been taking comments on how to remove barriers to AI development and deployment.