Trump Signs AI Executive Order, Attempting to Penalize States’ Regulatory Efforts
U.S. President Donald Trump signed an executive order Thursday evening that allows his administration to neutralize U.S. state regulations on artificial intelligence (AI).
“Investment in AI is helping to make the U.S. economy the ‘HOTTEST’ in the World, but overregulation by the States is threatening to undermine this Major Growth ‘Engine,’” Trump said in a White House statement. “Some States are even trying to embed DEI ideology into AI models, producing ‘Woke AI’ (Remember Black George Washington?). We MUST have one Federal Standard instead of a patchwork of 50 State Regulatory Regimes. If we don’t, then China will easily catch us in the AI race.”
The order widely ignores that Congress has failed to pass legislation that would create federal laws for regulating the development, procurement, and use of AI in the United States. Instead, state legislators are addressing the void by increasingly introducing bills on AI governance. In 2025 alone, all 50 states, Puerto Rico, the Virgin Islands, and Washington, D.C., considered AI legislation, and 38 states enacted or adopted about 100 measures, according to the National Conference on State Legislatures.
The executive order, “Ensuring a National Policy Framework for Artificial Intelligence,” attempts to redress this state-led approach to AI governance.
It instructs U.S. Attorney General Pam Bondi to create an AI Litigation Task Force to challenge state AI laws inconsistent with sustaining U.S. AI dominance through a minimally burdensome national policy framework for AI. These laws can be challenged in the court system on the grounds that they unconstitutionally regulate interstate commerce, are preempted by existing federal regulations, or are unlawful in the attorney general’s judgment.
The order also tasks U.S. Secretary of Commerce Howard Lutnick with consulting other administration personnel and then publishing an evaluation of existing state AI laws. The evaluation should identify “onerous laws” that conflict with the executive order and laws that should be referred to the attorney general’s task force.
“We want one central source of approval, and we have great Republican support,” Trump said during the executive order signing, WIRED reports. “I think we probably have Democrat support too, because it’s common sense. Every time you make a change, and it could be a very reasonable change, you still won’t get it approved if you have to go to 50 states. This centralizes it.”
To encourage states to comply with the executive order, the Trump administration has laid out a plan to withhold their share of $42.45 billion in Broadband Equity Access and Deployment (BEAD) Program funding if the enforce or enact certain AI regulations. The administration may also condition grant funding for other programs on states not enacting an AI policy that conflicts with the executive order.
Additionally, Federal Communications Commission (FCC) Chairman Brendan Carr will initiate a proceeding to determine whether to adopt a federal reporting and disclosure standard for AI models that preempts conflicting state laws. Federal Trade Commission (FTC) Chairman Andrew N. Ferguson will also issue a policy statement on applying the FTC Act’s prohibition on unfair and deceptive acts or practices to AI models, as well as explain the circumstances under which state laws can require alterations to the outputs of AI models.
Finally, David Sacks, special advisor for AI and crypto, and Michael Kratsios, assistant to the president for science and technology, are instructed to prepare a legislative recommendation to Congress to establish a uniform, federal policy framework for AI that would preempt state AI laws that conflict with the order.
The recommendation should not include preemptions to child safety protections, AI compute and data center infrastructure other than applicable permitting reforms, state government procurement and use of AI, and other topics to be determined, the order said.
Cody Venzke, senior policy counsel with the American Civil Liberties Union (ACLU), said in a statement that the order is unconstitutional since the U.S. Supreme Court has made it clear that the president does not have the authority to “unilaterally and retroactively change the conditions on federal grants to states after the fact.”
Venzke also said that the order displaces states from their critical role in ensuring that AI is safe, trustworthy, and nondiscriminatory.
“Bipartisan groups of governors, attorneys general, and lawmakers have opposed these efforts for good reason: Although AI might bring substantial benefits, it also carries substantial risks, and America will not win the AI ‘race’ if the AI used by the government, employers, schools, and health care providers is hallucinatory, unreliable, and dangerous,” Venzke said.
California Governor Gavin Newsom said the executive order would give the Trump administration “sole control over AI’s implementation” and doing so would “mean no AI safeguards,” according to a statement shared with Security Management.
Newsom added that the order “would hurt states like California, which is the birthplace of modern tech, the nation’s innovation economy, and a leader in advancing AI while also protecting the public and vulnerable populations like children and older adults.”
California—where leading AI developers OpenAI, Anthropic, Meta, and Google are headquartered—has enacted several AI governance policies during the last few years. They include measures to foster and guide the development frontier AI models, protocols for child safety and protections against self-harm, limits on sexually explicit deepfakes, requirements for AI watermarking, protections for performers’ digital likenesses, scam preventions from AI-generated robocalls, and safeguards against the risks of catastrophic harm from AI. Thursday's executive order could be used to attempt to preempt most of them.
