Tech Policy Roundup – June 2025

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Microsoft Leads Major Malware Takedown

Microsoft and a group of global partners, including Cloudflare, the U.S. Department of Justice, Interpol, and other law enforcement agencies, recently took coordinated action to disrupt Lumma Stealer—a highly prevalent infostealer malware used to steal passwords, credit card numbers, and cryptocurrency wallets. The action included seizing and facilitating the takedown, suspension, and blocking of approximately 2,300 malicious domains that provided infrastructure to the malware.

The takedown underscored the importance of close collaboration between industry and government to address cybersecurity threats. Coverage of this development can be found from Reuters and Cybersecurity Dive. For more detailed descriptions of the effort, check out this Microsoft on the Issues blog and this deep dive Microsoft Security blog.

Before the Memorial Day recess, the U.S. House passed major budget reconciliation legislation that included a 10-year moratorium on state AI regulation so that the federal government can create unifying, nationwide AI policies. This proposal would need to be approved by the Senate before becoming law.

Also last month, the U.S. Department of Commerce rescinded an earlier AI diffusion rule that limited AI chip sales to many nations, including allies. At the same time, the Department’s Bureau of Industry and Security provided new guidance that strengthens some export controls on AI technology.

Last month, the U.S. Senate Committee on Commerce, Science, and Transportation held a landmark hearing titled “Winning the AI Race: Strengthening U.S. Capabilities in Computing and Innovation.” The hearing included testimony from leaders of several AI-focused companies, including Microsoft Vice Chair and President Brad Smith, OpenAI Co-Founder and CEO Sam Altman, and others.

Testimony highlighted the need for streamlined federal permitting for building electrical infrastructure; expanded access to AI education and training; and an AI export policy that protects national security while expanding access for our allies to American AI services and components. You can view a replay of the hearing and access testimony at this link. Brad Smith’s testimony can also be found here.

In a recent blog and testimony in a hearing of the U.S. House Science, Space, and Technology Committee, Microsoft called on the U.S. government to make new quantum research commitments so our nation maintains its quantum computing leadership, which is critical to our nation’s competitiveness and security. Policy recommendations included increasing funding for quantum R&D; promoting workforce development and STEM education; and ensuring supply chain security for quantum technologies.

On May 19, Washington Governor Bob Ferguson signed the state’s new operating budget into law. The final budget totals $77.8 billion over two years, with more than $9 billion in new taxes, including an expansion of the retail sales tax. This expansion will impact many software developers, IT service providers, and a broad range of tech and professional service companies. For more information, see this recap from the Washington Policy Center. At a recent Technology Alliance event in Seattle, Microsoft President and Vice Chair Brad Smith raised concerns about taxes targeting Washington’s tech sector and the need to preserve the state’s economic competitiveness. Coverage of these comments can be found in GeekWire.