President Trump Signs Executive Order Limiting State Power to Regulate Artificial Intelligence

On 11 December 2025, President Trump signed an Executive Order (EO) titled, “Ensuring A National Policy Framework For Artificial Intelligence,” signaling a major shift in US AI policy. The EO aims to replace a patchwork of State regulations with a unified federal approach, directing federal agencies to develop a “minimally burdensome” national standard. The Administration argues that State-by-State rules create compliance challenges, particularly for start-ups, and threaten US competitiveness in the global AI race. 

Although the EO does not outright ban states from adopting laws to regulate AI, it empowers federal agencies to take aggressive steps to counter State measures deemed excessive or inconsistent with federal policy. At the center of this effort is the creation of an “AI Litigation Task Force” within the Department of Justice, which must be established within 30 days. This Task Force will identify and challenge State AI laws that conflict with the Administration’s objectives, focusing on statutes that compel AI models to “alter their truthful outputs” or mandate disclosures that may infringe on constitutional rights. Task Force challenges are expected to invoke the Commerce Clause, federal preemption principles, and First Amendment protections. The Task Force will consult regularly with senior White House advisors to determine which State laws warrant challenge. 

The EO also directs the Secretary of Commerce to publish, within 90 days, an evaluation of State AI laws considered “onerous” or inconsistent with federal policy. States identified in this report may lose eligibility for remaining funding under the Broadband Equity Access and Deployment (BEAD) Program, and agencies are instructed to consider conditioning discretionary grants on States agreeing not to enforce conflicting State laws. In addition, the EO calls on the Federal Communications Commission (FCC) to consider adopting federal reporting and disclosure standards that preempt conflicting State requirements and directs the Federal Trade Commission (FTC) to issue a policy statement clarifying that State laws mandating deceptive conduct in AI models are preempted under the FTC Act. Finally, the Administration will develop legislative proposals for a uniform federal AI framework that expressly preempts conflicting State laws, while preserving State authority over child safety, infrastructure, and procurement.

This move follows earlier failed attempts to impose a moratorium on State AI regulation through legislation, including proposals tied to the summer reconciliation process and the National Defense Authorization Act. With Congress unable to reach consensus, the Administration turned to executive action to advance its policy goals. 

While the EO sets an ambitious course, it raises significant legal questions. The President cannot unilaterally override State laws—that authority rests with Congress. Conditioning federal funds on State compliance may face constitutional challenges, and directives to agencies like the FCC and FTC to create preemptive standards may invite litigation over statutory limits. The Administration will likely argue that fragmented State rules burden interstate commerce and undermine national security, while States are expected to defend their laws as necessary for consumer protection and to combat discrimination.   

The regulatory landscape for AI is shifting rapidly. Companies that operate across multiple jurisdictions should anticipate increased federal litigation targeting restrictive State AI laws and prepare for evolving compliance obligations. These developments also create a unique opportunity for businesses to influence the shape of future AI policy.

Our team is actively monitoring this space and advising clients on how these changes may impact their operations. If your company wants to stay ahead of the curve—or play an active role in shaping the national AI framework—we encourage you to engage with our group. We can help you assess risk, develop compliance strategies, and position your organization to participate in policy discussions that will define the future of AI regulation.