WASHINGTON, D.C. – In his opening statement at today’s Senate Commerce Committee hearing, titled “Winning the AI Race: Strengthening U.S. Capabilities in Computing and Innovation,” Commerce Committee Chairman Ted Cruz (R-Texas) emphasized the need to secure American leadership in AI innovation and adoption. He highlighted AI’s vast potential to improve quality of life, create high-skilled jobs, and bolster U.S. global competitiveness.

To promote American dominance in AI innovation, Sen. Cruz advocated for a regulatory approach that draws inspiration from how Congress approached the nascent internet. Cruz pointed out how the European Union’s stringent internet regulations, compared to the light touch approach in the U.S., proved costly to Europe’s economy, which is now 50% smaller than the U.S. economy. Sen. Cruz announced he will soon release a new bill that creates a regulatory sandbox for AI — modeled on the approach taken by Congress and President Clinton with respect to the internet — to remove barriers to AI adoption, and prevent needless state over-regulation. The Cruz model will allow the AI supply chain to rapidly grow here in the U.S and beat China in the AI race.

China has prioritized AI as a core national objective to gain global influence, and Sen. Cruz warned that America’s global leadership hinges on its ability to build and deploy new technologies more effectively than China. Sen. Cruz criticized the Biden administration for saddling AI startups, developers, and users with needless oversight, thus impeding the U.S.’s ability to innovate and outpace China in technological advancement.

Sen. Cruz also praised the Trump administration’s recent action to rescind the misguided Biden-era “AI Diffusion Rule,” which would have severely restricted American companies from exporting AI technology to our allies and limited the global reach of advanced technologies manufactured in the U.S.

Here are Sen. Cruz’s remarks as prepared for delivery:

“In the last two years, AI has brought the United States, and the world, to a critical inflection point. AI may be a technology as transformative as the internet. It’s unleashed a new global industrial revolution with potential to unlock opportunities that improve our quality of life, create jobs, and stimulate economic growth.

“The country that leads in AI will shape the 21st century global order.

“As a matter of economic and national security, America has to beat China in the AI race. China has made AI central to its national strategy and China aims to lead the world in AI by 2030, investing heavily in AI adoption across industries like manufacturing and defense.

“In this race, the United States is facing a fork in the road. Do we go down the path that embraces our history of entrepreneurial freedom and technological innovation, or do we adopt the command-and-control policies of Europe? I would suggest Congress draw on the lessons we can learn from the dawn of the internet.

“In the early 1990s, Washington embraced the internet and explicitly adopted a style of regulation that was intentionally, and decisively, light-touch. Congress chose to deregulate under the Telecommunications Act of 1996, while President Clinton pursued tariff agreements and treaties that protected America’s intellectual property and technological exports.

“Further, in 1998, Congress enacted a ten-year internet tax moratorium so that State laws wouldn’t balkanize and stymie the promise of eCommerce.

“The results of these decisions were extraordinary.

“By 2000, the United States had recorded five straight years of historic highs in productivity gains and investment growth. Hundreds of thousands of new jobs were created and the U.S. became a top tech exporter, with massive sums of private investment pouring into the U.S. digital economy.

“By contrast, EU countries pursued a series of heavy-handed regulations that proved costly.

“In 1993, the U.S. and Europe had economies virtually identical in size. Today, our economy is more than 50 percent larger than Europe’s. The drivers of that are tech and the shale revolution. Those two comprise virtually the entirety of that massive growth over Europe. According to one EU Commission report, only six percent of global AI startup funding flows to EU firms. Six percent. That is one-tenth the amount going to U.S. companies. The report directly blames this yawning chasm on the EU’s nasty regulatory approach.

“And yet, the Biden administration tried to align AI policy with the EU to adopt their failed policies. President Biden’s sweeping AI executive order, the longest in U.S. history, cast AI as dangerous and opaque, laying the groundwork for audits, risk assessments, and regulatory certifications. Biden’s approach inspired similar efforts in state legislatures, threatening to burden startups, developers, and AI users with heavy compliance costs.

“They want a testing regime to guard against AI quote discrimination, and have government agencies provide ‘guidance documents,’ seemingly something out of Orwell, that will usher in what they call best practices, as if AI engineers lack the intelligence to responsibly build AI without the bureaucrats, many in the industry foolishly have supported such deterrence harmful regulations take many forms.

“Harmful regulations take many forms. Biden’s misguided, midnight ‘AI Diffusion Rule’ on chips and model weights would have crippled American tech companies’ ability to sell AI to the world. The Biden plan would have handed over key markets to China. We should want foreign countries, particularly our allies, to ‘buy American.’ I vocally opposed this Rule for months, and am pleased that the President plans to rescind it.

“All of this busybody bureaucracy — whether Biden’s industrial policy on chip exports or industry and regulator-approved ‘guidance’ documents — is a wolf in sheep’s clothing. To lead in AI, the U.S. cannot allow regulation, even the supposedly benign kind, to choke innovation or adoption.

“U.S. dominance in AI depends on two factors: innovation and adoption. Innovation drives breakthroughs and global competitiveness. Adoption ensures these tools empower American workers and businesses, enabling the U.S. to become the world’s leading adopter and exporter of AI.

“Thankfully, President Trump has largely reversed Biden’s AI agenda. In fact, I think AI was a sleeper issue in the last election. Americans wanted to see President Trump and Republicans champion AI policies focused on innovation and adoption. The contrast has been astounding. This year, there’s been over $1 trillion of new AI projects, including major investments in Texas like the CoreWeave data center in Plano and the $500 billion Project Stargate in Abilene by OpenAI, Oracle, and others.

“Adopting a light-touch regulatory style for AI will require Congress to work alongside the President - just as Congress did with President Clinton. We need to advance legislation that promotes long-term AI growth and innovation. That’s why I will soon release a new bill that creates a regulatory sandbox for AI — modeled on the approach taken by Congress and President Clinton at the dawn of the internet — that will remove barriers to AI adoption, prevent needless state over-regulation, and allow the AI supply chain to rapidly grow here in the U.S.

“That’s how we will accelerate economic growth, secure U.S. dominance in AI, and beat China.”

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