Trump Signs Executive Order Aimed at Curbing State-Level AI Regulation

President Donald Trump signed an executive order Thursday aimed at challenging state-level artificial intelligence legislation that the administration considers “excessive.”

Trump’s order was long anticipated and is a win for tech industry leaders who have been advocating for light regulation from states and the federal government. The president teased signing one last month, but backed down after Republican congressional leaders reportedly asked him to give them more time to work out legislation addressing AI.

“We’re leading China by a lot, China knows that, and not doing this would be the greatest gift to China … that China has ever received,” Trump said Thursday in the Oval Office.

Trump told reporters that the U.S. needs to be “very careful” not to overregulate AI in its “infancy,” arguing it would threaten innovation and economic development.

“We also know that a big part of our economy, it could be 50, 60% of our economy … is AI and AI-based. We have trillions of dollars in construction going on, and this construction would stop, or a lot of it would be altered,” Trump told reporters. Over the past year, tech giants have invested hundreds of billions on data centers needed for AI development.

The discourse around preemption has been the highest-profile debate related to AI happening in Washington, while few other AI-issues have gotten much attention from Congress. Trump was joined in the Oval Office by Sen. Ted Cruz, one of the biggest proponents of blocking states from regulating AI.

This order — which is almost certainly going to be challenged in courts by states like California, New York and Florida that have been attempting to regulate AI — directs Congress to create a federal framework for AI legislation while directing the administration to challenge “onerous” and “excessive” state laws, David Sacks, Trump’s main AI adviser said in the Oval Office.

The order calls for a multi-agency effort to challenge state-level AI regulation.

While Trump cannot unilaterally supersede state laws through an executive action, the order directs the Department of Justice to create an “Al Litigation Task Force” to challenge state laws that are deemed cumbersome for AI development under the interstate Commerce Clause of the Constitution.

It also directs Sacks and lead White House technology adviser Michael Kratsios to identify state legislation that could slow down industry development. Commerce Secretary Howard Lutnick, also present for the order signing, is directed to condition federal broadband funding for states the administration decides have gone too far in regulating AI.

Collin McCune, a lobbyist at Andreessen Horowitz, one of the main industry opponents of regulation, called the order “an incredibly important first step” in a post on X. He added that states “can’t provide the long-term clarity or national direction that only Congress can deliver.”

On Monday, Trump said on Truth Social that he intended to sign this executive order weeks after Republican House leadership reportedly asked him not to get involved. Trump said the U.S. lead on AI “won’t last long” if every state is “involved in RULES and the APPROVAL PROCESS.”

Trump’s involvement in this issue has also been met with backlash from many Republicans.

“An executive order doesn’t/can’t preempt state legislative action. Congress could, theoretically, preempt states through legislation,” Florida Gov. Ron DeSantis wrote on X on Monday. “The problem is that Congress hasn’t proposed any coherent regulatory scheme but instead just wanted to block states from doing anything for 10 years, which would be an AI amnesty.”

Steve Bannon, a former Trump adviser, recently called the effort to block states from regulating AI a “massive giveaway to Big Tech,” raising issues like child safety and censorship.

“You have more restrictions on starting a nail salon on Capitol Hill or to have your hair braided than you have on the most dangerous technologies in the history of mankind,” Bannon said on his podcast last month.

While this is a win for AI corporations, Congress will still need to act if it wants to prevent state regulation in the sector. States have already prepared to legally challenge this order.

Meanwhile, the AI industry has heavily lobbied Congress to pause state-level AI legislation and has created Super PACs to challenge AI skeptics in Congress. So far, most of the efforts to stop state legislatures have been successful.

House Republican leaders recently failed to include a provision blocking state-level AI legislation in this year’s must-pass defense authorization bill, which passed the House this week. A similar provision proposed by Sen. Ted Cruz was also stripped out of the Republican reconciliation package in the Senate by a vote of 99-1 earlier this year.

Brad Carson, president of Americans for Responsible Innovation, a group that advocates for AI regulation, said in a statement that this order will “hit a brick wall in the courts.”

“The executive order relies on a flimsy and overly broad interpretation of the Constitution’s Interstate Commerce Clause cooked up by venture capitalists over the last six months,” Carson wrote.

Democratic Rep. Zoe Lofgren, ranking member of the House Committee of Science, Space and Technology, called the order “not lawful” in a statement. She called for House Speaker Mike Johnson to engage in bipartisan AI negotiations.

“If the President really wants to address contradictory state laws, he can work with Congress on both sides of the aisle to debate and pass a federal standard,” Lofgren wrote.