On Thursday evening, with David Sacks, the White House AI and crypto czar, standing by, Donald Trump signed an executive order that aims to consolidate power over the regulation of artificial intelligence at the federal level. While this order cannot single-handedly override state AI laws, it instructs federal agencies to take measures that could diminish those laws’ impact and dissuade states from enacting new regulations that the federal government might contest or that could jeopardize funding for other programs.
The order specifically targets Colorado’s new consumer protection law, claiming that the ban on “algorithmic discrimination” could lead AI models to produce inaccurate results in efforts to avoid differential treatment of protected groups. The final version of the order is largely unchanged from a draft we reported on last month. It sets up an “AI Litigation Task Force,” led by the attorney general, to sue states whose AI laws are deemed inconsistent with the pursuit of “sustaining and enhancing the United States’ global AI dominance through a minimally burdensome national policy framework for AI.”
The Federal Trade Commission (FTC) is asked to clarify when state laws requiring changes to the truthful outputs of AI models can be overridden by the Federal Trade Commission Act’s prohibition against deceptive acts in commerce. Additionally, Commerce Secretary Howard Lutnick has been given 90 days to report on state laws that conflict with the order and identify those that may become ineligible for rural broadband funding from the Broadband Equity Access and Deployment (BEAD) program. Meanwhile, FCC Chairman Brandon Carr will work on establishing a federal standard for reporting and disclosing information about AI models that would supersede conflicting state laws.
Section 8 of the order includes a vague exception, stating that its recommendations do not aim to preempt “otherwise lawful state AI laws” related to child safety, AI infrastructure, government use of AI, and “other topics as determined.”
Over the past year, numerous bills and laws from state governments across the country have sought to impose regulations on artificial intelligence, creating a confusing patchwork that, according to Trump, complicates operations and innovation in the AI industry. Ideally, Congress would resolve this by passing federal AI regulations that would overwrite any conflicting state laws. However, this approach has proven controversial.
Frustrated by Congress’s slow pace and the rapid need for innovation, the AI sector and its political allies have sought a ban or moratorium on states crafting their own AI regulations. Despite two failed attempts in Congress to implement such a moratorium—once during discussions on Trump’s Big Beautiful Bill and another during negotiations over the National Defense Authorization Act—the administration appears to be pursuing a more aggressive stance.
While Congress’s attempts at a moratorium posed potential constitutional questions, the White House is treading into murky waters with its executive order. A leaked draft indicated that rather than establish regulations for AI, the administration plans to penalize states with “onerous” laws that contradict federal intentions.
Observers have noted that this draft would give substantial power to David Sacks, potentially sidelining important federal agencies typically involved in setting tech policy. Though he is technically a provisional government employee, Sacks operates as a direct channel between the president and Silicon Valley, influencing Trump’s tech policy significantly—so much so that Trump’s positions on AI, H1B visas, and chip sales have raised concerns among his core supporters.
Recently, Trump has indicated his readiness to sign an executive order overriding state laws. On Monday, he expressed on Truth Social that the order would create a single “Rulebook” for AI companies, eliminating the need to navigate “50 states, many of them bad actors, involved in RULES and the APPROVAL PROCESS. THERE CAN BE NO DOUBT ABOUT THIS! AI WILL BE DESTROYED IN ITS INFANCY!”
