5 Things to Know About Trump’s AI Executive Order

On December 11, President Trump signed a new AI executive order, Ensuring a National Policy Framework for Artificial Intelligence, granting the Attorney General (AG) power to sue states over AI regulations that the AG deems unconstitutional.

The order operationalizes the AI Action Plan the administration announced in July, which emphasized increasing federal pressure on state-level AI regulation, removing regulatory barriers and reducing burdens on AI innovation. It also reintroduces conditional funding restrictions tied to state AI legislation similar to those that were proposed but not enacted under the “One Big Beautiful Bill.”

1. The DOJ Can Now Sue States Over AI Laws

The AG will establish an AI Litigation Task Force to challenge state AI laws “inconsistent” with the order’s policy goals—including laws that may regulate interstate commerce, are preempted by federal regulations, or are “otherwise unlawful in the Attorney General’s judgment.”

2. Federal Government Will Identify “Problematic” State Laws

The Secretary of Commerce must publish an evaluation by March 11, 2026, identifying state AI laws that:

• Require AI models to “alter truthful outputs”
• Compel developers to disclose information conflicting with First Amendment rights
• Should be referred to the AI Litigation Task Force

It may additionally identify laws that “promote AI innovation” consistent with order’s goal of creating a “minimally burdensome” national standard.

3. States with “Onerous” AI Laws Risk Losing Federal Funding

By March 11, 2026, the Secretary of Commerce will issue a notice that makes states with “onerous AI laws” ineligible for non-deployment funds under the Broadband Equity Access and Deployment (BEAD) program.

This puts the July AI Action Plan’s principle into practice by tying a specific federal program’s funding decisions to a state’s AI regulatory environment.

Additionally, agencies will assess whether discretionary grants will be tied to states’ enforcement posture, such as:

• Not enacting AI laws that conflict with the order, or
• Entering binding agreements not to enforce such laws.

4. New Federal Standards Will Be Established

• The FCC will adopt a federal reporting and disclosure standard for AI models, building on the July directive to assess whether state AI regulations interfere with federal mandates
• The FTC will issue a policy statement on applying its prohibition on unfair and deceptive acts or practices to AI models.

5. Congress May Pass Uniform Federal AI Legislation

Presidential advisors will prepare a legislative recommendation for a uniform federal AI framework that preempts conflicting state AI laws. The recommendation will not propose laws that could preempt otherwise lawful state AI laws relating to:

• Child safety protections
• AI compute and data center infrastructure
• State government procurement and use of AI
• Other topics to be determined

Which State Laws Could be Impacted?

The order could affect enforcement of recently enacted state AI laws, including:

• California SB 53 – Requires large AI developers to publish safety plans to limit “catastrophic risk.” Effective January 1, 2026.
• Colorado SB 205 – Requires transparency notices and bias audits. Effective June 30, 2026.
• Illinois HB 3773 – Prohibits AI discrimination in employment decisions. Effective January 1, 2026.

How Have the States Responded So Far?

Thirty-six state attorneys general voiced opposition to any moratorium on state AI laws, warning that a broad federal moratorium would freeze states’ ability to respond nimbly as new risks emerge, undermining both existing protections and future regulatory innovation.

What’s Next?