Washington lawmakers had barely finished processing the news that Congress would not include a state AI ban in the National Defense Authorization Act (NDAA) when a recent rumor began leaking from the White House on Wednesday: President Donald Trump would indeed sign an executive order that would purportedly grant the federal government the ability to punish states for writing their own AI laws.
There was a possibility that it would be as drastic as the one leaked from the White House a few weeks earlier, which would give David Sacks, the venture capitalist and artificial intelligence billionaire and crypto czar of the White House, enormous influence in setting AI policy. There was a possibility that it would be watered down and symbolic, to deal with the political reality that the overwhelming majority of Americans oppose the idea of a state moratorium on artificial intelligence, while satisfying Trump’s already expressed desire for a moratorium. But the prospect itself was so dire that it triggered a group that rarely criticizes Trump: far-right MAGA Republican podcasters connected to the White House whisper network.
Steve Bannon’s war room on Wednesday night he devoted a lengthy segment to raising the alarm that the order was still in effect and hoping to restart the scheme they used to thwart last summer’s attempted moratorium on artificial intelligence. Since then, their argument against the moratorium has become increasingly far-right. “If President Trump signs this executive order, he will outrage everyone who believed in him to defend traditional Americans not only from immigrants but also from tech companies that arguably pose a greater threat to their jobs and their rights,” AI critic Joe Allen told host Natalie Winters on Thursday.
Behind the scenes, artificial intelligence experts, lawyers and political operatives – whether they were pro-preemptionists or not – were working their connections in the White House, hoping someone could convince Trump that a moratorium – at least one this quick and aggressive – would be political suicide. Two people familiar with White House dynamics said the person most likely to be able to stop Trump from signing the EO is Susie Wiles, the White House chief of staff, who has effectively imposed a sense of discipline on Trump’s political activities, enjoys great trust from Trump and is known for her aversion to internal drama.
“She’s smart,” said a Republican operative working on artificial intelligence policy. “I think he understands how politically bad this could be for the president.”
Recent polls show a clear, bipartisan majority of Americans they oppose the idea of a state moratorium on the use of artificial intelligence. Few demographics are more hostile to the idea than the Republican MAGA base, which has long distrusted Massive Tech and sees artificial intelligence as a threat to job security, customary family values and the mental health of their children. Supporting a moratorium would be disastrous for potential Republican presidential candidates with ties to the MAGA base, such as Vice President J.D. Vance.
The upcoming semi-finals are also on the line. Recent elections across the country show that the Republican Party is already in a arduous position: Last month, Recent Yorkers overwhelmingly elected Democratic Socialist Zohran Mamdani over Trump-backed Andrew Cuomo as mayor; meanwhile, Virginians overwhelmingly elected Democrat Abigail Spanberger to the House of Representatives over Republican Winsome Earle-Sears. Just this week, Republicans won a special election for an open Tennessee House seat by 9 points, but in a district that Trump won in the presidential election by 22 points.
Nothing is official until Trump puts pen to paper, but a draft executive order leaked before Thanksgiving stunned lawmakers, artificial intelligence experts and even proponents of preemption, the idea that the federal government should create one set of AI regulations rather than a 50-state patchwork. But instead of working on a federal framework that would protect AI regulation in a tight and constitutional manner, several Republicans and the Trump White House adopted a tougher strategy: a blanket moratorium on state AI laws that would last for years, arguing that it would allow AI innovation to accelerate while Congress worked on the framework.
The concept of a moratorium has proven divisive even within the GOP: During the first attempt to pass a moratorium under Trump’s Massive Stunning Act, a handful of Senate Republicans broke party ranks and joined Senate Democrats in opposing it. The last hope was to impose a moratorium on the NDAA, which would require agreement on language by both Democrats and Republicans on the Armed Services Committees.
But the draft executive order, released during bilateral NDAA negotiations, was seen as an overly aggressive consolidation of power under Sacks, a venture capitalist riddled with reports of his massive conflicts of interest— under the auspices of expropriation. As written, the order would direct several departments to begin penalizing states with “burdensome” AI regulations — all of which would be required to work with Sacks, the special adviser on artificial intelligence and cryptocurrencies, while excluding government agencies with expertise in artificial intelligence and technology, as well as the Office of Science and Technology Policy (OSTP), the White House center for technology-related interagency coordination.
The draft order would also put the Justice Department in the precarious and exhausting position of suing states for enforcing their own laws by directing the attorney general to create an “AI Litigation Task Force” that would target states with so-called “burdensome” AI laws. (The move is already being questioned as part of a Trump-led push to sue states for enforcing their own environmental laws. Several states filed lawsuits against the federal government in response.)
Indeed, seasoned Washington operatives on both sides of the issue have been frustrated by the uncompromising and aggressive way the AI and VC industries have approached the expropriation: bypassing concerned lawmakers, ignoring troublesome regulators and talking directly to the president, from billionaire to billionaire, hoping Trump will get Republicans to comply. It’s inevitable that Trump will sign some sort of expropriation executive order just because he’s already stated he wants it. However, the actions of the broligarchy made this concept politically radioactive.
“I think there’s a big divide in the industry on this,” said Doug Calidas, vice president of government affairs at Americans for Responsible Innovation Edge. While “more sophisticated” lobbyists who have been working in Washington for some time, like Google and Microsoft, “know the art of the possible,” players like Sacks and fellow VC Marc Andreessen are not budging. But “it is people like these who now hold the levers of power.”
Lauren Feiner provided additional reporting.