Federalizing AI: White House Issues Executive Order To Establish Unified National AI Policy

Washington, D.C. (December 17, 2025) - In furtherance of the Administration's efforts to make the federal government the voice on artificial intelligence (AI), on December 11, 2025, President Trump issued an Executive Order (EO) titled "Ensuring a National Policy Framework for Artificial Intelligence" (the "Order"). This Order is aimed at advancing the federal government's ambition to maintain U.S. global leadership in AI by preempting divergent state-level AI regulations and creating a cohesive national regulatory framework. As discussed below, this change is not simple, and businesses are well advised to follow these developments closely to minimize risks and maximize opportunities.

Key Elements of the Order

The Order, building on earlier federal AI policy actions, characterizes state-by-state regulation as burdensome and potentially inconsistent with national strategic goals. Accordingly, the Order:

• Establishes an AI Litigation Task Force within the Department of Justice (DOJ) to challenge state laws deemed inconsistent with national AI policy objectives.
• Directs Congress to enact federal regulatory standards to preempt conflicting state requirements and calls for federal review of existing state AI laws to identify those that may conflict with the Order's policy goals.
• Provides authority for federal departments to condition discretionary grants on states' refraining from enforcing conflicting AI laws.
• Tasks agencies with proposing legislative options for establishing a uniform federal regulatory framework for AI that would supersede conflicting state laws.

While a patchwork AI regulatory framework could lead to uneven regulation of AI developers, as well as companies with internal AI systems, creating unnecessary legal risk, using executive authority to preempt state regulation may—in the absence of congressional action—pose constitutional and federalism concerns. Moreover, a national approach may inadvertently stifle regulatory experimentation that could identify better models of governance. Nonetheless, the Order demonstrates a clear federal commitment to centralizing AI governance.

That said, until Congress enacts federal AI legislation, AI developers, as well as any company with integrated AI systems, must comply with state-level AI regulations. Companies should take a pragmatic approach and seek legal counsel early, as varying state AI regulations pose legal and compliance risks. Companies should also begin planning to align internal policies and procedures with anticipated federal AI regulations.

AI Strategy Across the Federal Government

In parallel to this broader federal regulatory direction, the U.S. Department of Health and Human Services (HHS) issued its own AI strategy, which reflects federal intent to integrate AI responsibly across agencies. Similarly, the Food & Drug Administration (FDA) deployed agentic (autonomous) AI tools with the goal of enabling more efficient review of drugs, biologics, medical devices, and manufacturing operations. These efforts align with the broader White House AI Action Plan and demonstrate how federal agencies are operationalizing national AI priorities within specific sectors. Collectively, this Order and other recent AI executive orders, as well as the AI strategies of various agencies, underscore the federal government's strategic objective to position the U.S. as a global leader in AI development, deployment, and governance.

Implications for Stakeholders

A centralized federal AI standard may help the U.S. compete with countries pursuing unified AI approaches by streamlining governance and reducing multi-jurisdictional barriers. For AI developers and companies with internal AI systems, this could mean lower compliance costs and less legal uncertainty operating across state lines. That said, coordinating federal AI policy across agencies and sectors presents significant governance challenges, so a full federal AI framework may be some time in coming.

Nevertheless, AI developers, healthcare organizations, technology firms, and other affected industries, should monitor ongoing federal actions, including litigation task force priorities and proposed legislative frameworks; just because a federal standard may not be imminent does not mean states won't have to succumb to the Trump Administration's efforts to preempt existing state laws that conflict with national AI policy objectives. Companies should evaluate how federal preemption could shift regulatory obligations and ultimately introduce new federal standards. Legal counsel can help prepare for both and, importantly, help avoid exposure to legal risk.

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.