Trump Eyes Executive Order to Rein In Patchwork State AI Policies

By Vismaya V

President Donald Trump is reportedly seeking to axe state AI laws via an executive order that would override regulations in California and other states in an effort to centralize control in Washington.

The draft order, seen by Axios, would direct Attorney General Pam Bondi to establish a task force to challenge state AI measures and restrict federal funding to states that pass laws deemed "onerous." 

It would also instruct the Federal Trade Commission to issue guidance on how existing consumer protection laws could preempt state AI regulations.

AI and crypto czar David Sacks would oversee much of the implementation work outlined in the order, per the summary, which is still being revised and may change before any final release.

Decrypt has reached out to White House for further comment.

Sharon Klein, partner at Blank Rome and co-chair of the firm's Privacy, Security & Data Protection Practice, told Decrypt that such a mandate “would provide a floor for states that do not have AI statutes" and could be "beneficial to businesses in providing a baseline for compliance."

But she noted that concerns about whether "a one-size-fits-all rulebook" could "slow emergency responses when AI-generated harms appear locally."

It would also depend heavily on "the way the statute is implemented, funded, and enforced."

The move comes as House Republicans consider using the must-pass National Defense Authorization Act (NDAA) as their final chance this year to advance state-level AI preemption, with Majority Leader Steve Scalise telling Punchbowl News they are “looking at” inserting the provision into the defense bill.

The effort faces an uphill battle as in July, the Senate voted 99-1 to strip a 10-year moratorium on state AI laws from President Trump’s “One Big Beautiful Bill,’ with Senator Marsha Blackburn reversing her support for even a shortened 5-year compromise just one day after striking the deal with Senate Commerce Chair Ted Cruz.

Urgency required?

Trump amplified the urgency on Wednesday on Truth Social, warning that state overregulation threatens America's lead in the AI race. 

"Some States are even trying to embed DEI ideology into AI models, producing 'Woke AI,'" he wrote. "We MUST have one Federal Standard instead of a patchwork of 50 State Regulatory Regimes. If we don't, then China will easily catch us in the AI race."

The draft order states that American companies should be free to innovate “without cumbersome regulation,” noting how state legislatures have introduced “over 1,000 AI bills” that could undermine the “innovative culture.”

Under the proposal, the Commerce Secretary would assess broadband funding eligibility based on states' AI laws within 90 days, while FCC chair Brendan Carr would initiate proceedings to determine federal disclosure standards that preempt conflicting state rules.

The draft order specifically criticizes California’s SB 53, calling its risk disclosure mandates for major AI developers “complex and burdensome.”

California also recently enacted SB 243, a separate law governing AI companion chatbots that requires them to self-identify and restrict certain content for minors.

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