Trump’s AI Executive Order: State AI Laws Under Attack
On December 11, 2025, President Trump signed an executive order, “Ensuring a National Policy Framework for Artificial Intelligence” (“EO”), designed to remove barriers to United States AI leadership so that AI companies are free to innovate without cumbersome regulation. The EO expressly states that it is aimed at preempting excessive state regulation.
Implications for California Employers
Importantly, the EO does not preempt any existing state laws. Employers in California must continue to adhere to existing state regulations regarding AI, which include laws enacted under the Fair Employment and Housing Act (FEHA) and the California Consumer Privacy Act (CCPA), effective January 1, 2026. These state laws will remain enforceable unless a court blocks them or Congress enacts a federal law that preempts them.
Actions Directed by the Executive Order
The EO instructs the Executive Branch to undertake several actions aimed at reducing state regulation of AI:
- The Attorney General must establish an “AI Litigation Task Force” within 30 days to challenge state AI laws that conflict with the EO’s aim of enhancing US AI dominance through a minimally burdensome policy framework.
- The Secretary of Commerce is tasked with publishing an evaluation of state AI laws within 90 days, identifying particularly onerous laws that are inconsistent with the EO.
- Federal funding may be conditioned based on whether a state’s AI laws conflict with the EO’s goals, as determined by executive departments and agencies.
- The Chairman of the Federal Communications Commission must initiate proceedings to adopt a federal reporting and disclosure standard for AI models that may override conflicting state laws.
- The Chairman of the Federal Trade Commission is required to issue a policy statement regarding the application of the FTC Act’s prohibition on unfair and deceptive practices as they pertain to AI models, clarifying when the FTC Act preempts state laws requiring changes to “truthful outputs” of AI.
- A legislative recommendation will be jointly prepared by the Special Advisor for AI and Cybersecurity and the Assistant to the President for Science and Technology to establish a uniform federal policy framework for AI that conflicts with state laws.
Key Carve Outs
This legislative recommendation includes several key carve outs:
- Child safety protections
- AI computing and data center infrastructure
- State government procurement and use of AI
- Other topics to be determined
Ongoing Developments
For the time being, employers should continue to comply with all existing state AI laws. However, this regulatory landscape is poised to evolve rapidly. Anticipate active legal challenges from both sides: the Litigation Task Force challenging state laws and states contesting the EO. Furthermore, state employment laws are not explicitly exempt from the forthcoming legislative recommendations, meaning Congress could pass laws that preempt certain state employment-related AI regulations.
