Missouri Lawmakers Kill AI Regulations After Trump Threatens to Withhold Broadband Funds

Missouri lawmakers abandoned proposed artificial intelligence regulations last week after the Trump administration threatened to withhold nearly $900 million in federal broadband funds from states that dare to regulate the technology.

The bill, sponsored by Republican state Sen. Joe Nicola, would have established basic liability rules for AI systems -- specifying that harm caused by AI always traces back to a person or company, not the machine itself. It would have prohibited AI from gaining legal personhood, owning property, serving as a corporate officer, or entering into marriage with humans.

Amendments added prohibitions on AI prescribing controlled substances and required age verification for minors using AI chatbots, particularly those that could encourage self-harm or sexual conduct.

None of it mattered once Trump issued an executive order in December creating an "AI Litigation Task Force" to challenge state laws deemed too restrictive. The order explicitly threatened to make states with "onerous" AI regulations ineligible for remaining federal broadband funds.

Choosing Internet Over Accountability

Missouri was awarded $1.7 billion through the federal Broadband Equity Access and Deployment Program. The state has already allocated $814 million to connect over 200,000 rural locations to high-speed internet -- leaving $900 million in "non-deployment funds" hanging in the balance.

Republican state Sen. Jamie Burger read Trump's entire executive order aloud during Senate debate, pointedly asking Nicola for comment.

"An executive order is not law," Nicola responded. "I would prefer the federal government to have some guardrails on AI, but they have failed us."

Congress has indeed failed to pass any AI legislation, though the Trump administration issued a "national AI policy framework" on March 20 to guide federal lawmakers toward minimal regulation.

Republican state Sen. Jason Bean of Holcomb told colleagues the bill wasn't worth risking rural broadband funding. "Deployment of rural broadband, it's not an easy task," Bean said. "There's underserved, but there's also areas that are not served at all. And I think this would be very, very concerning if we put at risk our federal funding."

Republican state Sen. Jamie Burger agreed: "It's a huge deal."

Federal Bait and Switch

The broadband funding saga itself reveals how the Trump administration manipulates states into compliance. Missouri was originally awarded $1.7 billion in August for rural internet expansion, with guidance prioritizing fiber optic connections.

But two months before Missouri's deadline to select contractors, the National Telecommunications and Information Administration gave states 90 days to redo their entire selection process with new priorities. Instead of fiber, states were told to choose the lowest bid -- including from satellite internet providers.

The directive resulted in $21 billion in "savings" across all states. Republican U.S. Sen. Joni Ernst of Iowa has already filed legislation to claw that money back to the Treasury.

Republican state Rep. Louis Riggs of Hannibal is sponsoring a resolution urging the federal government to let Missouri keep its nondeployment funds. "They call it savings," he told a committee. "I call it theft."

Innovation or Intimidation

Nicola told The Independent that the uncertain fate of broadband funds is the primary obstacle to his legislation. "Especially with some of the senators in rural districts that need the money to get fiber out to the people, that's the sticking issue that we just need to clear up," he said.

He plans to seek feedback from the White House about the bill -- though he added, "I take great offense at any president that is telling the state what they can and can't do."

That offense apparently has limits. The bill stalled rather than risk Trump's retaliation.

Burger told The Independent he shares concerns about AI dangers. "People always say, 'People are being violated by AI,' and I know that, and I hate that," he said -- before explaining why he opposed doing anything about it.

The episode illustrates a pattern: Trump issues executive orders threatening federal funding, states abandon regulations to protect their constituents, and the administration consolidates power while claiming to champion innovation and states' rights.

Missouri residents will get their rural internet. They just won't get protections from the AI systems that will increasingly shape their lives -- because their elected officials chose not to risk the president's wrath.