What Does Trump's AI Executive Order Mean For Colorado's AI Act?

On Dec. 11th, 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, and more particularly specifically names Colorado's pioneering consumer protection legislation as an example of harmful "excessive State regulation." For Colorado businesses and consumers wondering what this means, the answer is that Colorado's AI provision, in its current form, likely faces high hurdles to implementation.

Understanding Trump's AI Executive Order

Trump's AI 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 the administration deems 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 during an August 2025 special legislative session implementation Colorado's AI Law was delayed from February 1, 2026 to June 30, 2026.

Notwithstanding the Administration's characterizations of the Act in the AI Order, Colorado's AI Act was ostensibly implemented to prevent algorithmic discrimination in high-stakes decisions about employment, housing, healthcare, and financial services. Business groups argued 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 and the Trump Administration's AI Order further muddies the waters for what will come of Colorado's AI Act in 2026. Companies preparing for the Colorado AI Act's June 2026 implementation must now consider whether federal litigation will block enforcement. The Attorney General's ongoing rulemaking to clarify compliance requirements could be rendered meaningless if the AI Order is deemed to preempt Colorado's law. Businesses may delay or abandon compliance preparations, risking penalties if the law survives or wasting resources if it doesn't.

Legal Challenges to Trump's AI Executive Order

Whether Trump's executive order can preempt state laws without congressional legislation is another question, most likely to be determined in litigation. Under the Constitution's Supremacy Clause, federal law is the "supreme Law of the Land"—allowing federal law to preempt any conflicting state law. Critically, executive orders are not laws. An executive order's authority must come from one of two sources: (i) from a constitutional identified presidential power (like the power to pardon, commute sentences, direct the military, or make recess appointments) or (ii) from the president's ability to direct and effectuate the interpretation and enforcement by an administrative agency of a duly passed federal law. So, while an executive order can shape how a law or administrative regulation is enforced (as part of the president's constitutional authority to enforce the law), there appears to be no such law or regulation identified within the AI Order to provide the necessary authority for the order to have any legal effect.

Further complicating the determination of the preemptive effect of this Executive Order is that Congress, the branch of government explicitly designated in the Constitution with clear authority to pass laws which preempt state law, has thus far not taken any step to address this issue—failing in all of its previous attempts to federally preempt state AI regulations (most recently in July 2025).

Thus, the question becomes, can an executive order which does not derive any authority from any Constitutionally identified presidential power or any duly passed law or regulation preempt a dutifully passed state law, particularly where Congress itself has not taken action to prevent such a state law when given multiple opportunities. The courts will undoubtedly 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 almost certainly attempt to address federal concerns while trying to preserve core consumer protections. But, repeated failures to reach consensus on reforms to the AI Act during the August 2025 special session indicate that amendments aimed at softening the impact of the AI Act or attempting to meet the nebulous standard set forth in the AI Order of "minimally burdensome national policy framework for AI" in order to avoid Justice Department action is unlikely. More importantly, Colorado's lawmakers may not have the time necessary to reach such an agreement anyway.

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. See Trump AI Executive Order, Section 4. If listed, the Justice Department's "AI Litigation Task Force" will likely sue Colorado – perhaps within months. Colorado's Attorney General would then need to decide whether to defend the law or seek accommodation with federal regulators.

With all the uncertainty surrounding the AI Act and the President's AI Order, what is certain is that Trump's AI executive order places Colorado's Artificial Intelligence 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. Some Colorado businesses may see Trump's AI Order as a win, or at least a step in the right direction.

For other states considering AI regulation, Colorado's experience serves as a cautionary tale about the political and legal obstacles facing state-level consumer protections in emerging technology. And regardless of the outcome, the resolution of this issue will undoubtedly shape AI policy nationwide for years to come.

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