The Federal AI Preemption Push: President Trump Signs The Executive Order Titled "Ensuring A National Policy Framework For Artificial Intelligence"

On December 11, 2025, President Trump signed the Executive Order titled "Ensuring a National Policy Framework for Artificial Intelligence." This Executive Order (EO, Order) preempts state-level AI regulation by creating multiple enforcement mechanisms to challenge and neutralize state AI laws that the Administration deems inconsistent with federal policy favoring minimal AI regulation.

Background

The Executive Order builds upon the Trump Administration's prior AI policy actions, including Executive Order 14179 (January 23, 2025), which revoked Biden-era AI oversight measures, and the July 2025 "America's AI Action Plan." The Administration has framed state AI regulation as an obstacle to US competitiveness in the global AI race, particularly against China.

Congressional efforts to pass AI preemption legislation, including attempts to include a 10-year moratorium on state AI laws in the "One Big Beautiful Bill" and the National Defense Authorization Act have thus far failed.

Key Provisions of the Executive Order

1. AI Litigation Task Force

The Attorney General must set up an AI Litigation Task Force within 30 days. The Task Force's sole responsibility will be to challenge state AI laws on multiple grounds, including unconstitutional regulation of interstate commerce, federal preemption, and First Amendment violations. The Task Force will coordinate with the Special Advisor for AI and Crypto, the Assistant to the President for Science and Technology, and other senior officials.

2. State Law Evaluation

Within 90 days, the Secretary of Commerce must publish an evaluation identifying state AI laws "onerous" or inconsistent with federal policy. The evaluation must specifically identify laws that require AI models to "alter truthful outputs," or that compel disclosures in a manner allegedly violating the First Amendment. The Order specifically criticizes Colorado's algorithmic discrimination law as potentially forcing AI models to "produce false results" to avoid a "differential treatment or impact" on protected groups.

3. Federal Funding Restrictions

The EO leverages federal funding as an enforcement mechanism through two approaches:

• BEAD Program Conditions: States with "onerous AI laws" become ineligible for non-deployment funds under the Broadband Equity Access and Deployment Program.

• Discretionary Grant Conditions: Federal agencies must assess whether discretionary grants can be conditioned on states either not enacting conflicting AI laws or entering binding agreements not to enforce such laws during the grant period.

4. FCC Preemption Proceeding

The FCC Chairman must initiate a proceeding within 90 days of Commerce's state law evaluation to determine whether to adopt a Federal reporting and disclosure standard for AI models that preempts conflicting State laws.

5. FTC Preemption Policy

Within 90 days, the FTC Chairman must issue a policy statement explaining when state laws requiring alterations to "truthful outputs" of AI models are preempted by the FTC Act's prohibition on deceptive practices. This novel theory suggests that state anti-discrimination requirements could be federally preempted as compelling deceptive practices.

6. Legislative Framework

The Order directs preparation of legislative recommendations for a uniform federal AI framework. Notably, the Order carves out certain areas from proposed preemption:

• Child safety protections

• AI compute and data center infrastructure (except permitting)

• State government procurement and use of AI

• Other topics to be determined

Legal Analysis and Limitations

It is important to note that this Executive Order does not have the force of law and is not self-executing. The Order directs federal agencies to take various actions, but the actual preemption of state laws would require either successful litigation, regulatory action within agencies' statutory authority, or congressional legislation.

Key limitations include:

• Constitutional Questions: Legal experts have raised concerns about the Administration's authority to direct agencies to condition grants on state policy choices in this manner.

• Litigation Uncertainty: Interstate commerce and preemption challenges to state AI laws face uncertain outcomes in court.

• Agency Authority: The FCC and FTC preemption actions will depend on whether courts find sufficient statutory authority.

• Duration: Executive Orders last only as long as the Administration that issues them, absent congressional codification.

State Laws Potentially at Risk

Based on the Order's language and Administration statements, the following categories of state AI laws appear most vulnerable to federal challenge:

• Algorithmic discrimination laws (e.g., Colorado SB 21-169)

• AI transparency and disclosure requirements (e.g., California's AI disclosure laws)

• AI impact assessment mandates

• Automated decision-making laws

• AI-specific data protection requirements

Criticism from States

States, including California, have issued statements criticizing President Trump's new Executive Order, arguing that it seeks to preempt state laws designed to protect the public from the risks of unregulated AI. California Governor Gavin Newsom condemned the order as a corrupt power grab that would undermine state authority and consumer protections while enriching the President's allies. California emphasized its leadership in responsible AI governance, citing its advanced safeguards for child safety, digital likeness protection, deepfake regulation, and prevention of AI-enabled scams, as well as its partnerships with major tech companies and academic experts to foster innovation responsibly.

Recommended Client Actions

1. Audit Current Compliance Programs: Review existing AI governance and compliance frameworks against both federal policy direction and state law requirements. Identify potential conflicts.

1. Monitor Commerce Department Evaluation: The 90-day evaluation of state AI laws will provide critical guidance on which laws the Administration views as problematic.

1. Track FCC and FTC Proceedings: Consider participating in the FCC's preemption proceeding and monitoring the FTC's policy statement development.

1. Assess Grant Exposure: Organizations receiving federal discretionary grants should evaluate potential impacts of conditioning provisions.

1. Maintain State Compliance: Until litigation or regulatory action provides clarity, existing state AI laws remain enforceable. Continue compliance efforts while monitoring developments.

1. Engage in the Legislative Process: Consider participating in the development of federal AI legislation that may emerge from this Order's directives.

Conclusion

This Executive Order signals a significant escalation in the federal government's efforts to establish AI policy primacy over state regulation. While the Order's ultimate effectiveness remains uncertain pending litigation, regulatory action, and potential legislative developments, it creates immediate uncertainty for organizations operating under state AI laws.

The VisionAI+ Group will continue to monitor developments and provide updates as the agencies implement the Order's directives. Please contact us with any questions about how these developments may affect your operations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.