White House vs. The States: Trump EO Launches Legal War on Local AI Rules

The Trump administration has officially declared war on the growing patchwork of state-level artificial intelligence regulations. In a sweeping move that escalates the tension between federal ambition and local control, President Trump signed a new Executive Order (EO) on December 11, 2025, titled "Ensuring a National Policy Framework for Artificial Intelligence."


The order aims to dismantle what the White House calls "onerous" and "innovation-killing" state laws, establishing a "minimally burdensome" national standard designed to secure American dominance in the global AI race.

The "Preemption" Playbook
The Executive Order does not merely suggest a federal standard; it weaponizes federal agencies to actively dismantle conflicting state rules.

DOJ "Litigation Task Force": The Attorney General has been directed to establish a dedicated task force within 30 days. Its sole mandate is to sue states—specifically targeting jurisdictions like California and Colorado—whose AI safety or bias laws are deemed to "unconstitutionally regulate interstate commerce."


The "Truthful Outputs" Clause: In a direct challenge to anti-discrimination laws, the EO directs the FTC to classify state regulations that require AI models to alter "truthful outputs" (often used to mitigate bias) as deceptive trade practices. The administration argues these laws force developers to embed "ideological bias" into their code.


Funding as Leverage: Perhaps the most controversial provision involves the purse strings. The Department of Commerce is instructed to review state eligibility for federal grants—including the massive BEAD broadband funding—conditioning billions of dollars on whether states agree to repeal or suspend their conflicting AI regulations.

Carve-Outs and Confusion
While the order is aggressive, it stops short of total preemption. Following intense lobbying from parent advocacy groups, the final text includes specific exemptions where states retain their authority:

Child Safety: Laws specifically designed to protect minors online are immune from the new federal challenges.

Infrastructure: States can still regulate the physical construction and permitting of data centers.

State Procurement: Governments retain the right to decide which AI tools they buy for their own use.

The "Patchwork" Problem
The order comes after Congress failed to pass a legislative moratorium on state AI laws earlier this year. With major tech hubs passing their own strict safety acts, the administration argues that a "50-state compliance nightmare" will drive AI development to China.

"We need one common-sense American standard, not fifty little dictatorships telling our innovators how to code," said a senior White House policy advisor during the signing ceremony.

Legal experts, however, predict immediate chaos. "We are heading for a constitutional showdown," noted a constitutional law professor at Georgetown. "The White House is effectively trying to bully states into submission by threatening their internet infrastructure funding. The courts will be busy for years."