Trump's New Executive Order Seeks to Ban State AI Regulation

Trump’s New Executive Order Takes Aim at State AI Laws, Sparking Regulatory Battle

In a significant move to shape the future of artificial intelligence governance in the United States, President Donald J. Trump recently signed an Executive Order (EO) titled, “Ensuring A National Policy Framework For Artificial Intelligence.” The core tenet of the directive is to replace what the administration calls an "onerous patchwork" of state-level AI regulations with a single, "minimally burdensome" federal standard. Proponents argue this is essential for maintaining America’s global dominance in AI, asserting that conflicting compliance requirements across 50 states stifle innovation, raise costs for startups, and slow down development in a race against rivals like China. The EO establishes an "AI Litigation Task Force" within the Department of Justice to aggressively challenge state laws deemed unconstitutional or harmful to innovation, threatening to withhold non-deployment federal funding from states that maintain regulations the White House finds overly restrictive, particularly those that might force AI models to "alter their truthful outputs" to meet bias mitigation mandates.

However, the EO has immediately ignited a fierce debate over federal authority and consumer protection, outlining clear cons for state-level safeguards. Critics, including civil liberties groups and state lawmakers, contend that federal preemption removes vital public safeguards in areas like algorithmic discrimination, deepfakes, and data privacy, effectively ceding the regulatory field to large tech companies. They argue that state laws, such as those in California and Colorado that mandate bias audits or transparency, are necessary responses to real-world harms, and that stifling these "laboratories of democracy" leaves citizens vulnerable. Furthermore, legal analysts have questioned the EO's legality, suggesting the President is attempting to use executive action and litigation to achieve a level of federal preemption that is constitutionally reserved for Congress, potentially leading to years of uncertainty and court battles over whether states can legislate to protect their residents from the most pressing risks of emerging AI technology.

The Impact on Local Government

For local governments especially - cities, counties, and ports - the Executive Order introduces a significant layer of regulatory uncertainty and complication. While the federal and state governments battle over preemption, local entities are left to determine which legal framework to follow. In practical terms, the federal challenge to state regulations may render current or planned state-level AI regulatory action less relevant. Even if a state has a higher standard for algorithmic fairness or transparency, the federal EO pressures local governments navigate a federal framework that punish violators through lawsuits, loss of federal funding, or more. Local authorities may be forced to pivot their compliance, procurement, and deployment strategies toward the emerging federal framework.

Source: https://www.businessinsider.com/trump-ai-executive-order-one-rule-state-regulations-2025-12