Trump signs AI executive order pushing to ban state laws

On Thursday evening, with White House AI and crypto czar David Sacks looking on, Donald Trump signed an executive order to give the federal government unilateral authority to regulate artificial intelligence. The order cannot by itself unilaterally overturn state AI laws, but it directs federal agencies to take steps to reduce or eliminate their influence and discourage states from passing laws that the federal government could challenge or jeopardize crucial funding for other programs.

He specifically denounces Colorado’s recently passed consumer protection law, saying that “banning ‘algorithmic discrimination’ could even force AI models to produce false results in order to avoid ‘differential treatment or impact’ on protected groups.” »

The final order is largely the same as the draft copy we obtained and reported on last month. It orders the creation of an “AI Litigation Task Force” to be led by the Attorney General, suing states over any AI laws he deems inconsistent with the goal of “maintaining and strengthening U.S. global dominance in AI through the least restrictive domestic AI policy framework possible.”

The FTC is directed to issue a policy statement explaining “the circumstances under which state laws that require changes to truthful results of AI models are preempted by the Federal Trade Commission Act’s prohibition on engaging in deceptive acts or practices affecting commerce.”

It also directs Commerce Secretary Howard Lutnick to issue, within the next 90 days, a report on states whose laws are considered to be in conflict with the order, and to determine which states may become ineligible for rural broadband funding under the Broadband Access and Deployment (BEAD) program. Meanwhile, FCC Chairman Brandon Carr is tasked with working on procedures to “adopt a federal reporting and disclosure standard for AI models that preempts conflicting state laws.”

Section 8 of the order contains a notable and vague exclusion, stating that its recommendations do not propose to preempt “otherwise lawful state AI laws” covering child safety, the construction of computational and data infrastructure for AI, the use of AI by state governments, and “other matters to be determined.”

In the last year alone, a growing pile of bills submitted and laws passed by state governments across the country have attempted to place guardrails on artificial intelligence — a patchwork of laws, as Trump phrased it, that the AI ​​industry says makes it extremely difficult to operate and innovate. In an ideal situation, Congress would manage this confusing patchwork by passing AI regulatory laws at the federal level that would automatically preempt or override any conflicting state laws.

The approach they took, however, proved controversial. Citing Congress’s slow pace and the speed with which they must pursue innovation, the AI ​​industry and its political allies have instead called for a ban, or moratorium, on states writing or enforcing their own AI laws. In the last year alone, Congress has twice tried to pass a moratorium, and failed each time — first during the debate over Trump’s Big Beautiful Bill, where it ultimately died in the Senate, and then failed during negotiations over the National Defense Authorization Act, which sets annual defense spending.

But even though Congress’ attempts at a moratorium have drawn criticism, the moratorium would have been constitutional if it had been signed. The White House, however, is treading into murky territory. A few weeks ago, a draft executive order was leaked illustrating how the Trump administration would approach preemption: instead of trying to put safeguards on AI, they would instead try to punish states with “onerous” laws that contradict what the White House wanted.

Political observers and policy insiders noted that the proposed executive order would have given exorbitant power to venture capitalist billionaire David Sacks, who is the White House’s AI and crypto czar, while removing crucial federal agencies and offices that would normally have been involved in crafting technology policy. Although he is technically a temporary government employee, Sacks serves as a direct liaison between the president and the Silicon Valley elite, and has gained considerable influence over Trump’s technology policy – ​​so much so that Trump’s statements on AI, H1B visas and chip sales have horrified the MAGA base.

However, in recent weeks, Trump has begun signaling a willingness to sign an executive order that would override state laws. On Monday, he said on Truth Social that the order would, in theory, create “one rulebook” so AI companies don’t have to keep track of “50 states, many of which are bad actors, involved in the RULES and APPROVAL PROCESS.”