Trump gives state AI regulation the presidential middle finger
President Trump and his patrons in big tech have long wanted to block states from implementing their own AI regulations. After failing twice to do so in Congress, the US president has issued an executive order that would attempt to punish states that try to restrain the bot business.
The executive order, issued Thursday, largely mirrors a draft order leaked last month despite the White House declining to verify the draft's veracity.
In short, Trump has empowered Attorney General Pam Bondi to set up an AI Litigation Task Force "whose sole responsibility shall be to challenge state AI laws" that the administration considers inconsistent with its policy "to sustain and enhance the United States' global AI dominance through a minimally burdensome national policy framework for AI."
What that policy will look like remains undetermined, with Trump also declaring in the order that he wants his special advisor for AI and crypto, venture capitalist David Sacks, and his science and tech advisor, Michael Kratsios, former chief of staff to Peter Thiel, to propose legislative recommendations for what a federal AI policy framework will look like.
The AI industry, which has lobbied hard against state regulation, will be thrilled to have a of couple AI-friendly individuals crafting federal policy recommendations, which is one of the only portions of the EO not given a deadline.
Trump wants Bondi's task force to be set up within 30 days to fight state AI laws, and has given administration officials 90 days to accomplish a number of other tasks.
The 90-day measures include asking the Commerce Department to compile a list of state laws it wants referred to the AG's task force for litigation, figuring out which states will be restricted from accessing Broadband Equity Access and Deployment (BEAD) funding or discretionary grants due to their AI laws, how to squeeze state AI laws into Federal Trade Commission Act prohibitions on unfair and deceptive acts or practices, and even initiating a proceeding to determine whether the government should adopt a reporting and disclosure standard for AI models in lieu of state-level ones.
Actual legislation, on the other hand, can just happen whenever, setting us up for the regulation-free AI hellscape that state attorneys general warned about when Trump's 2025 budget reconciliation bill first came out with its ten-year state AI law moratorium.
That moratorium was the first state AI law ban that Congress struck down, with the Senate voting 99-1 to remove it from the bill. The second attempt to squeeze a ban in came in the 2026 National Defense Authorization Act, which also passed without the measure.
Messy EO likely to cause more problems than it fixes
It's unclear whether Congress will change its mind about banning state AI laws, even if future federal policy proposals claim to reduce regulation.
One thing is for sure, though. Yet again, both liberal and conservative experts are unhappy with Trump's move.
"The executive order is not just dangerous, it's unconstitutional," American Civil Liberties Union senior policy counsel Cody Venzke said in a statement today. "The Supreme Court has made clear that the president may not unilaterally and retroactively change the conditions on federal grants to states after the fact."
In other words, attempts to restrict discretionary grants or BEAD funding to states in the EO could render it null and void if challenged.
On the other side of the house, Ryan Hauser, a research fellow at the the Mercatus Center think tank, opined that the US needs some sort of federal AI regulation, but is worried Trump's EO will only stifle innovation through more regulatory uncertainty.
"Raising the implementation costs on bad state laws that directly contravene existing federal law is a strategy that has some merit, but the admin will have a weaker argument in the courts without legislation passed by Congress," Hauser said.
Hauser also said that the EO's prongs of regulatory, prosecutorial, and budgetary measures are probably only going to piss off state and federal legislators, making it harder to get any "pro-innovation" legislation through Congress.
"By not leading on Congressional AI legislation and slow-walking any legislative recommendations, the White House leaves the door open for more restrictive and reactive legislation to gain traction in the House and Senate," Hauser predicted. "In the long run, many of these counter-proposals would undercut America's long-run AI dominance."
So here we are with the President taking unilateral action in spite of Congress's overwhelming rejection of stopping state AI laws and offering no actual alternative. Until the EO is blocked by the courts or Congress, or weak, industry-friendly federal legislation replaces state laws, welcome to the AI hellscape. ®
