US President Donald Trump is weighing an executive order that would give the federal government authority to challenge or override state laws regulating artificial intelligence, according to drafts reviewed by Reuters. The draft highlights potential legal and financial steps the administration could use to respond to what AI companies describe as a patchwork of state rules that complicate compliance. Trump has also warned that it would be a “disaster” if each state adopted different AI rules.
Draft outlines lawsuits and funding cuts for states
The draft proposes allowing federal agencies to sue states whose AI laws conflict with interstate commerce or existing federal regulations. It will also permit Washington to withhold certain broadband funds from states with strict AI requirements. A White House official stated to Reuters that any discussion continues to be speculative until an order is officially announced. US Attorney General Pam Bondi has been directed to create an “AI Litigation Task Force” focused on contesting state AI laws. It slams California’s new AI disclosure statute as complex and says a Colorado law aimed at preventing algorithmic bias could pressure companies to adjust their systems. The Senate voted 99-1 against a proposal that would curtail broadband funds for states regulating AI.
The proposals have raised concerns from industry groups that are stating that state rules could slow AI development. Lawmakers who are opposing earlier attempts to limit state authority stated that states must retain the ability to safeguard residents from deepfakes, fraud and harmful content.
Multiple agencies to review the draft
As per a report by Politico, the Department of Justice, the Federal Trade Commission and the Federal Communications Commission would inspect state AI laws and challenge them when it is required. The draft also instructs Commerce Secretary Howard Lutnick to review AI laws within ninety days and to consider restricting broadband funds. AI adviser David Sacks would assist in identifying state rules that warrant federal action.
The FCC and Sacks would study a federal AI disclosure standard and could set aside conflicting state requirements. Critics, as quoted by Politico, argued that states have longstanding authority to regulate technology locally. California State Senator Scott Wiener told the news outlet that Trump “has no power to issue a royal edict cancelling state laws.”
