Good day. The Senate voted down a provision in President Trump’s budget reconciliation bill on Tuesday that would have banned states from creating laws designed to regulate artificial intelligence for the next 10 years.

The moratorium, part of the One Big Beautiful Bill Act, was heavily opposed by state officials. In June, 260 state lawmakers sent a letter to Congress urging them to drop the provision, and a letter signed by more than 40 state attorneys general was sent in May.

State officials celebrated the win, saying the flexibility allows them to tailor laws more effectively to protect their residents. However, some warned that the issue is unlikely to be dead, just defeated for now.

Read our full story here.

Also today:

• Cairncross gets Senate committee nod for national cyber director job.
• M&S CEO expects worst effects of cyberattack to be over by August.
• Treasury sanctions hacker hosting service.

Defense companies with links to Israel face an increased risk of hacks from Iran, the FBI, Justice Department, Department of Defense and National Security Agency said in a joint memorandum issued Monday. (Dow Jones Risk Journal)

Cairncross Clears Key Senate Committee. President Trump’s nominee for National Cyber Director, Sean Cairncross, cleared a major hurdle Monday to being confirmed to the nation’s top cyber role. The Senate Homeland Security and Governmental Affairs Committee voted to advance Cairncross’s nomination to a full Senate vote. (The Record)

The sanctions also targeted four individuals who allegedly lead the group as well as two wholly owned Aeza Group subsidiaries. The U.S., together with the U.K.’s National Crime Agency, sanctioned a purported Aeza front company in the U.K. as well. (Dow Jones Risk Journal)

The WSJ Pro Cybersecurity team is Deputy Editor Kim S. Nash (on X @knash99), reporter James Rundle, reporter Angus Loten, and reporter Catherine Stupp (@catstupp). Follow us on X @WSJCyber. Reach the team by replying to any newsletter you receive or by emailing Kim at kim.nash@wsj.com.