Trump Targets State AI Regulations in Federal Override Push

The Trump administration says it’ll sue states that establish rules for artificial intelligence that go beyond a standard of “minimally burdensome” regulation – a step the U.S. president said is necessary to ensure China doesn’t pull ahead in a global race for AI supremacy.

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Donald Trump signed an executive order Thursday directing federal prosecutors to spin up a federal task force within 30 days dedicated to challenging state regulation. “We have the big investment coming, but if they had to get 50 different approvals from 50 different states, you can forget it because it’s impossible to do,” Trump said from the Oval Office.

“China is unified because they have one vote, that’s President Xi. He says do it, and that’s the end of that,” he told reporters. Throttling Chinese global ambitions for tech dominance and power has been a long-standing U.S. goal, although the administration has reversed many Biden-era restrictions on selling advanced chips to Beijing. Trump recently okayed sales of Nvidia H200 Tensor Core GPUs to China in exchange for the federal government receiving a quarter cut of the proceeds (see: Smuggling Ring Charged as Trump Okays Nvidia Sales to China).

Four states – California, Colorado, Utah and Texas – have laws broadly governing private sector deployment of AI, shows International Association of Privacy Professionals tracking data. Additional states have more specific laws, such as an Illinois statute that goes into effect Jan. 1 limiting the use of AI in job recruitment or other employment settings. South Dakota earlier this year banned AI-generated deepfakes from political advertisements running within months of an election.

The executive order singles out Colorado for banning algorithmic discrimination, asserting that it may “force AI models to produce false results in order to avoid a ‘differential treatment or impact’ on protected groups.” Studies have shown that algorithmic bias can cause poorer results for minorities in settings such as healthcare.

The order uses federal funding for enforcement. It directs the Department of Commerce to publish an evaluation within 90 days identifying state AI laws that conflict with the order’s policy. It must also issue a notice stating that states with onerous AI laws are ineligible for broadband infrastructure development grants. Federal agencies will assess whether they can condition discretionary grants on states enacting conflicting AI laws or entering binding agreements not to enforce existing laws during grant performance periods.

Trump told reporters his hands-off regulatory agenda has “great Republican support,” and “probably” from Democrats as well. Previous attempts, mainly championed by Sen. Ted Cruz, R-Texas, to pass an anti-regulatory law in Congress floundered against Republican opposition. Among the opponents has been Tennessee Sen. Marsha Blackburn, whose state, home to the estate of rock legend Elvis Presley, approved in 2024 a law against unauthorized uses of artists’ voices and likenesses. Cruz stood beside Trump at Thursday’s signing ceremony.

Utah Governor Spencer Cox, also a Republican, said on social media Thursday that he prefers an alternative executive order that does not bar state laws, writing that states must help protect children and families while America accelerates AI leadership. Republican Florida Governor Ron DeSantis said that an executive order cannot preempt state legislative action, adding Congress could theoretically accomplish preemption through legislation.

The executive order calls for legislative action, directing David Sacks, the administration’s AI and crypto czar, and the Office of Science and Technology Policy to recommend statutory language for Congress to establish a uniform federal framework that preempts state AI laws.

White House staff secretary Will Scharf said the order sets up “decisive action” to ensure AI can operate within a single national framework.

The order exempts certain state laws from potential preemption, including child safety protections, AI compute and data center infrastructure regulations beyond generally applicable permitting reforms, and state government procurement and use of AI. “Kid safety, we’re going to protect. We’re not pushing back on that, but we’re going to push back on the most onerous examples of state regulations,” Sacks said.

Whether lawsuits challenging state regulation in federal court will succeed is questionable. John Bergmayer, legal director of Public Knowledge, told NPR that attempting to bypass Congress on national preemption doesn’t have a solid legal foundation. “They’re trying to find a way to bypass Congress with these various theories in the executive order. Legally, I don’t think they work very well,” Bergmayer said. He cited a Supreme Court ruling upholding a California law regulating the pork industry by concluding the statute didn’t inhibit interstate commerce despite arguments the law would affect pig farming beyond state lines.

Rep. Don Beyer, D-Va., co-chair of the bipartisan Congressional Artificial Intelligence Caucus, said the order will create “a lawless Wild West environment for AI companies that puts Americans at risk.” The order, he charged, likely violates the 10th Amendment principle of federalism. “Trump is using this executive order to bypass this opposition in both chambers of Congress,” Beyer said, adding that he is exploring legislative options with members in both chambers and both parties.