On Thursday evening with White House AI and cryptocurrency king David Sacks looking over his shoulderDonald Trump signed the executive order whose goal is to take unilateral power to regulate artificial intelligence for the federal government. The order itself cannot unilaterally repeal state AI laws, but it directs federal agencies to take steps to limit or eliminate their influence and discourage states from passing regulations that could challenge the federal government or put at risk crucial funding for other programs.
He specifically brings up Colorado the recently passed Consumer Protection Actstating that “banning ‘algorithmic discrimination’ could even force AI models to generate false results to avoid ‘disparate treatment or impact’ on protected groups.”
The final order is largely the same as the draft we received and wrote about last month. Directs the creation of an “Artificial Intelligence Litigation Task Force,” which will be led by the attorney general, suing states over any AI laws he deems inconsistent with the goal of “maintaining and enhancing U.S. global AI dominance through a minimally burdensome national AI policy framework.”
The FTC is directed to issue a policy statement explaining “the circumstances in which state laws requiring changes to the true outputs of artificial intelligence models are preempted by the Federal Trade Commission Act’s prohibition on engaging in deceptive trade-impacting activities or practices.”
It also directs Secretary of Commerce Howard Lutnick to produce a report within the next 90 days on the states whose regulations are found to conflict with the regulation and which states may be ineligible for rural broadband funding under the Broadband Equity Access and Deployment (BEAD) program. Meanwhile, FCC Chairman Brandon Carr is tasked with working on an action to “adopt a federal reporting and disclosure standard for artificial intelligence models that prevents conflicting state laws.”
Section 8 of the order includes a noteworthy and vague exception, stating that its recommendations do not propose invalidating “otherwise lawful state AI laws” covering child safety, building AI computing and data infrastructure, state governments’ utilize of AI, and “other topics to be determined.”
In the past year alone, a growing number of convoluted bills and regulations passed by state governments across the country have tried to erect barriers to artificial intelligence — a patchwork of regulations, as Trump put it, that the AI industry says makes it extremely complex to operate and innovate. Ideally, Congress would deal with this confusing patchwork by passing artificial intelligence regulatory laws at the federal level, which would then nullify or automatically invalidate any conflicting state laws.
However, the approach they took proved controversial. Citing the snail-paced pace of Congress and the speed at which they must innovate, the AI industry and its political allies have instead implemented a ban or moratorium on states creating or enforcing their own AI laws. In the last year alone, Congress has tried to pass a moratorium twice and failed both times – first during the debate on Trump’s massive lovely bill, which ultimately died in the Senate, and then failure in negotiations on the National Defense Authorization Actwhich determines annual defense spending.
While congressional attempts at a moratorium have been met with criticism, it would be constitutional if signed into law. However, the White House is entering unclear territory. A few weeks ago, a draft executive order was leaked that illustrates how the Trump administration intends to approach preemption: Instead of trying to put up barriers to artificial intelligence, it would instead try to punish states with “burdensome” regulations that would go against the White House’s wishes.
Policy observers and policy insiders noted that the draft order would hand excessive power to billionaire venture capitalist David Sacks, who serves as the White House’s artificial intelligence and cryptocurrency czar, while excluding key federal agencies and offices that would normally be involved in setting technology policy. While technically a transient government employee, Sacks serves as a direct link between the president and the Silicon Valley elite and has gained enormous influence over Trump’s technology policy – so much so that Trump’s statements on artificial intelligence, H1B visas and chip sales have terrified the MAGA base.
But over the past few weeks, Trump has begun to signal his willingness to sign an executive order that would take precedence over state law. On Monday, he told Truth Social that the order would theoretically create “just one set of regulations” so that AI companies wouldn’t have to follow “50 countries, many of which are bad actors, involved in the RULES and APPROVAL PROCESS. THERE CAN BE NO DOUBT ABOUT THAT! AI will be destroyed in the early days!”