White House issues Executive Order establishing a national policy framework for Artificial Intelligence and signaling a strategy to preempt conflicting state laws

The EO identifies the growing patchwork of state-by-state AI regulation as a barrier to innovation, citing concerns over compliance requirements, mandates for ideological bias in AI models, and state laws that impermissibly regulate beyond state borders. Coming on the heels of sweeping state measures such as California’s Transparency in Frontier Artificial Intelligence Act, the EO frames these issues as an urgent federal concern. As a legal matter, a presidential executive order does not itself create law or unilaterally preempt state statutes. Under the Supremacy Clause (U.S. Const. art. VI, cl. 2), federal preemption typically flows from Congress or valid agency action, and executive orders primarily serve to direct federal agencies. Accordingly, the EO signals that the Trump Administration will press preemption arguments through litigation and agency policymaking, inviting courts to test the scope of federal authority over current state AI regulatory regimes. The EO recognizes that Congress must pass federal-level AI legislation in order for state-level regulations of the AI industry to be preempted.

The key elements of the EO include:

1. AI Litigation Task Force. Within 30 days, the Attorney General is directed to establish an AI Litigation Task Force to challenge state AI laws inconsistent with the federal policy, including on grounds of unconstitutional regulation of interstate commerce and preemption by federal law.
2. Evaluation of State AI Laws. The Secretary of Commerce is tasked, within 90 days, to publish an evaluation of existing state AI laws, identifying those that conflict with the national policy and recommending laws for challenge by the Task Force. The evaluation may also highlight state laws that promote AI innovation in line with federal objectives.
3. Restrictions on Federal Funding. States with onerous AI laws identified in the evaluation may become ineligible for certain federal funding under the Broadband Equity Access and Deployment (“BEAD”) Program and other discretionary grant programs, unless they agree not to enact or enforce such laws during the funding period.
4. Federal Reporting and Disclosure Standard. The Chairman of the Federal Communications Commission is instructed to consider adopting a federal reporting and disclosure standard for AI models that would preempt conflicting state requirements.
5. Preemption of State Laws Mandating Deceptive AI Practices. The Chairman of the Federal Trade Commission (“FTC”) is to issue a policy statement clarifying the circumstances under which state laws requiring alterations to truthful AI outputs are preempted by the Federal Trade Commission Act’s prohibition on unfair and deceptive acts or practices.
6. Legislative Recommendations. The Special Advisor for AI and Crypto and the Assistant to the President for Science and Technology are to prepare legislative recommendations for a uniform federal AI policy framework that preempts conflicting state laws, with exceptions for child safety, AI infrastructure, state procurement, and other specified areas of federal interest.

The EO signals an aggressive federal approach to preempt conflicting state laws through litigation, agency action, and legislative recommendations. While the EO itself does not create binding law, it marks a significant escalation in federal efforts to assert consistency in AI policy.

Of the various areas identified in the EO, one of the more interesting points may be the degree to which the FTC determines that the Federal Trade Commission Act laws preempt existing state laws that regulate algorithmic bias. Industry participants should continue to monitor the recommendations, policies, and analysis arising from the various directives of the EO. It is possible that existing state laws could be used to model federal laws created in response to the EO. Also, recognizing the benefits of national harmonization of AI laws, some states have reportedly already been analyzing legislation of other leading states, such as California, to see if that legislation can be mirrored in their own law.

Our team continues to monitor these developments and their implications for U.S. and global AI policy.