What Does Trump’s AI Executive Order Mean for Colorado’s AI Act?
On December 11, President Trump issued an AI Executive Order titled “Ensuring A National Policy Framework For Artificial Intelligence” that poses an existential threat to Colorado’s AI Act. The President’s AI order explicitly targets state-level AI laws, specifically naming Colorado’s pioneering consumer protection legislation as an example of harmful “excessive State regulation.” For Colorado businesses and consumers, this means that Colorado’s AI provision, in its current form, likely faces significant hurdles to implementation.
Understanding Trump’s AI Executive Order
The executive order establishes a framework to challenge and potentially override state AI regulations. Within 30 days, the Justice Department must create an AI Litigation Task Force specifically to sue states over their AI laws. The Commerce Department has 90 days to identify “onerous” state regulations, including Colorado’s AI Act—which the order claims forces AI systems to produce false results to avoid discrimination. Most concerning for Colorado, the order threatens to withhold federal broadband funding from states with AI laws deemed burdensome.
Colorado’s AI Act: Already Under Pressure Before Federal Intervention
Passed in May 2024, Colorado’s AI Act has faced mounting challenges since its enactment. Following intense tech industry lobbying, the implementation of Colorado’s AI law was delayed from February 1, 2026 to June 30, 2026.
The act was designed to prevent algorithmic discrimination in high-stakes decisions about employment, housing, healthcare, and financial services. However, business groups argued that the Colorado AI Act would increase compliance costs and drive companies out of state.
What Trump’s AI Executive Order Means for Colorado Businesses and Consumers
Colorado businesses face significant uncertainty as Trump’s AI order complicates the future of the Colorado AI Act. Companies preparing for the June 2026 implementation must now consider whether federal litigation will block enforcement. The ongoing rulemaking by the Attorney General to clarify compliance requirements could be rendered meaningless if the AI order is deemed to preempt Colorado’s law. Consequently, businesses may delay or abandon compliance preparations, risking penalties if the law survives or wasting resources if it does not.
Legal Challenges to Trump’s AI Executive Order
Whether Trump’s executive order can preempt state laws without congressional legislation is uncertain and likely to be determined in litigation. Under the Constitution’s Supremacy Clause, federal law is the “supreme Law of the Land”—allowing it to preempt any conflicting state law. However, executive orders are not laws and their authority must come from either a constitutional presidential power or the president’s ability to enforce a duly passed federal law.
Thus, the question arises: can an executive order lacking constitutional authority preempt a duly passed state law, especially when Congress has failed to act against such state laws despite multiple opportunities? The courts will ultimately decide.
What Happens Next for Colorado’s AI Act
Colorado lawmakers have until the June 2026 implementation deadline to revise the Colorado AI Act. It is expected that they will attempt to address federal concerns while preserving core consumer protections. However, repeated failures to reach consensus on reforms during the August 2025 special session indicate that amendments aimed at softening the act’s impact are unlikely.
Under the AI order, the Commerce Department has 90 days to review and determine whether Colorado’s AI Act appears on the federal government’s list of problematic state laws. If listed, the Justice Department’s AI Litigation Task Force will likely sue Colorado—potentially within months. The Colorado Attorney General will then need to decide whether to defend the law or seek accommodation with federal regulators.
As it stands, Trump’s AI executive order places Colorado’s AI law in serious jeopardy. Amid intense tech industry opposition and political gridlock at the state level, the Colorado AI Act now faces coordinated federal efforts to dismantle it. The coming months will determine whether Colorado can defend its authority to protect residents from algorithmic discrimination or whether federal preemption will leave consumers vulnerable to unchecked AI decision-making systems.
For other states considering AI regulation, Colorado’s experience serves as a cautionary tale about the political and legal obstacles to state-level consumer protections in emerging technology. Regardless of the outcome, the resolution of this issue will shape AI policy nationwide for years to come.
