State AI Laws Under Federal Scrutiny
On December 11, 2025, President Trump signed an executive order titled “Ensuring a National Policy Framework for Artificial Intelligence” (Executive Order 14365). This order establishes a federal policy aimed at addressing the growing number of state-level AI regulations governing the AI ecosystem, with the goal to sustain and enhance the United States’ global AI dominance through a minimally burdensome national policy framework for AI.
Executive Order 14365: Overview
Building on the Trump Administration’s AI Action Plan issued on July 23, 2025, and legislative efforts to initiate a moratorium on state AI laws, the Executive Order sets out a plan to curb the proliferation of state AI laws and leverage various federal tools to discourage and challenge state regulations that conflict with the Administration’s policies.
However, since federal preemption typically stems from congressional enactments rather than executive orders, Executive Order 14365 may not independently displace state AI laws but rather provide guidance for federal agencies and official conduct under the policy framework.
Key Policy Objectives
Under Executive Order 14365, several key policy objectives are outlined:
- AI Litigation Task Force: The Attorney General is directed to establish an AI Litigation Task Force within 30 days to challenge state AI laws inconsistent with the policy, focusing on issues such as interference with interstate commerce and First Amendment concerns.
- Evaluation of State AI Laws: The Secretary of Commerce is tasked with publishing an evaluation within 90 days, identifying “onerous” state AI laws that should be referred to the AI Litigation Task Force.
- Restriction on Federal Assistance: Executive departments and agencies will evaluate and condition a state’s eligibility for federal funding based on its alignment with the policy.
- Federal Reporting and Disclosure Standard: The FCC will initiate a proceeding within 90 days to consider adopting a federal reporting standard for AI models, which would preempt conflicting state laws.
- FTC Mandate on AI Models: The FTC is directed to issue a policy statement within 90 days regarding the application of the FTC Act to AI models, identifying state laws that may require altering the “truthful outputs” of AI models, with Colorado’s AI Act as a notable example.
- Legislative Recommendations: The Special Advisor for AI and Cybersecurity and the Assistant to the President for Science and Technology are instructed to prepare legislative recommendations for a uniform federal AI policy framework that would preempt conflicting state laws.
Notably, the Executive Order specifies certain carve-outs, including child safety protections and state government procurement and use of AI.
Implications for AI Developers and Deployers
While the interaction between federal initiatives and existing state requirements remains uncertain, several key takeaways are essential for AI developers and deployers:
- State AI Law Compliance: Existing state AI laws, such as Colorado’s AI Act and California’s Transparency in Frontier Artificial Intelligence Act, will likely not be impacted in the short term by Executive Order 14365. Businesses should continue to comply with state AI laws until there is greater clarity.
- Monitoring Legal Challenges: Active legal developments are expected from both the AI Litigation Task Force and states potentially challenging Executive Order 14365. Key legal debates will likely focus on state authority under the Tenth Amendment, the Dormant Commerce Clause, and the legality of conditioning federal funding on state AI laws.
- Stakeholder Involvement: Proposed federal reporting and disclosure standards for AI models will undergo a formal rulemaking process, allowing stakeholders to influence policy details.
- Areas of Growing Regulatory Patchwork: Certain areas, including child safety protection and AI infrastructure, will continue to be governed by a patchwork of evolving state-level regulations, necessitating close monitoring to manage compliance risks.
In conclusion, while Executive Order 14365 aims to streamline federal policy regarding AI, the complexities of state laws and ongoing legal developments will require vigilance from businesses operating within the AI ecosystem.
