President Donald Trump’s administration is reportedly working on a draft executive order titled “Eliminating State Law Interference with National AI Policy.” The goal is to pre-empt state regulations on artificial intelligence and introduce uniform federal standards.
The draft text, obtained by Axios, instructs federal agencies to take aggressive action against states whose AI laws conflict with national policy, potentially by withholding federal funding and filing lawsuits against the state.
Main provisions of the draft
The draft order outlines several strategic points.
The Federal Communications Commission (FCC) is directed to begin the process within 90 days to adopt federal reporting and disclosure standards for AI models, specifically to pre-empt conflicting state laws. States whose AI laws deviate from this federal template may have broadband or infrastructure subsidies withheld. The Department of Justice (DOJ) plans to create a task force to challenge state AI laws on grounds such as interfering with interstate commerce and duplicating regulations.
Why the shift? Conflict between the federation and the states
President Trump has repeatedly warned that the “50-state regulatory regime” is dividing America’s leadership in AI. He argues that this fragmentation will pave the way for international rivals, especially China, to overtake the United States in the global AI race.
The order focuses on preempting state laws rather than passing new laws, as the federal AI bill remains stalled, but the administration appears to be using executive action to fill the gap.
state backlash
The proposed move prompted resistance from state governments and some federal lawmakers.
Many states argue that they need the authority to locally regulate AI, especially to protect the public from harms such as bias, fraud, misinformation, and other technological threats. Some Republican lawmakers have also expressed concerns about federal government overreach. Governors such as Ron DeSantis have publicly opposed attempts to insert federal preemption powers into unrelated legislation, such as the annual National Defense Authorization Act.
Legal and constitutional implications
The draft executive order aims to assert federal supremacy over state AI laws, but faces clear legal constraints.
Under the U.S. Constitution, only Congress has the express power to entirely preempt state laws. An executive order can affect, encourage, or condition federal funding, but it cannot specifically override state law in all cases. Legal experts argue that directing the Justice Department to litigate each state’s law raises serious questions about separation of powers and states’ rights.
Impact on the technology industry and innovation
If the order becomes final, it could change the way companies approach AI regulation.
For national technology companies, a single federal standard could reduce the complexity of compliance across 50 states and accelerate innovation and investment. For states, the move could limit local regulators’ flexibility in addressing specific AI risks specific to their jurisdictions, such as privacy, discrimination, and algorithmic transparency. While regulatory clarity may reduce uncertainty for startups and emerging AI companies, centralized regulation may also make it difficult to promote new types of localized safeguards.
Next steps and timeline
Although draft text exists, the order is not yet final and may be subject to significant changes before publication. Congressional Republicans are reportedly considering language regarding national AI preemption in the upcoming National Defense Authorization Act (NDAA), acknowledging that executive action alone may not be enough. Countries are preparing for legal backlash. Some may object that any subsidy withholding system is constitutionally mandatory.
This proposal is a major step toward moving centralized federal AI governance in the United States from numerous state-level rules to a single national standard. This reflects how high the stakes in the AI race are perceived to be, especially with competing international powers. But the move also highlights long-standing tensions between federal power and states’ rights in the American system of governance.
The Trump administration is preparing a powerful executive order to pre-empt state AI laws and assert federal supremacy in AI regulation. The plan is billed as a move to eliminate regulatory confusion and increase U.S. competitiveness in the field of AI, but it also raises significant questions about the constitutional and legal governance of the federal state.
