US creates federal AI order, aims to preempt state laws

On December 11, 2025, President Donald J. Trump signed the Executive Order “Ensuring a National Policy Framework for Artificial Intelligence,” directing federal agencies to create a single, “minimally burdensome” national AI standard and to check conflicting state laws. The order directs the Attorney General to establish an AI Litigation Task Force within 30 days to challenge state AI laws the administration deems unlawful or preempted. It also orders the Secretary of Commerce to publish a 90-day evaluation of state AI measures.

The order asks agencies to consider conditioning certain federal grants — including Broadband Equity, Access, and Deployment (BEAD) program funds — on whether states adopt policies consistent with the federal framework. It also asks the Federal Trade Commission to clarify how the FTC Act applies to state laws that would require AI models to alter truthful outputs. Those preemption and funding levers are central to the administration’s enforcement strategy.

Several states have already moved forward with their own AI restrictions. New York and California advanced new measures despite the order, creating the prospect of near-term legal clashes between state regulators and the new federal task force. Legal and policy observers say litigation is likely. Companies should expect shifting compliance obligations and possible funding conditions tied to state policy choices.

Why It Matters

• The DOJ task force (launch within 30 days) signals litigation will be a primary federal tool — states with enacted AI laws are likely early defendants.
• Commerce’s 90-day evaluation can label state laws “onerous” and influence BEAD and other discretionary funding eligibility, creating a fiscal incentive for state policy alignment.
• Enterprises should pause multi‑state compliance rollouts until the Commerce evaluation and any federal guidance clarify preemption, disclosure, and model-behavior rules.
• Procurement and grant teams must track BEAD and other funding conditions; states with restrictive AI laws may face funding penalties that affect infrastructure and deployment timelines.