President Donald Trump signed an executive order aimed at blocking state-level AI regulations, saying a fragmented patchwork of laws could deter investment and harm U.S. competitiveness with China. The order directs the Attorney General to form a task force to challenge state laws and instructs the Commerce Department to identify problematic regulations, while threatening to restrict federal grants, including broadband funding, for states that pass their own AI rules. Several states — including Colorado, California, Utah and Texas — have already enacted laws requiring transparency and limits on certain data collection by AI systems.
Trump Signs Executive Order to Preempt State AI Rules, Threatens To Withhold Federal Grants
Flanked by Sen. Ted Cruz R-Texas, left, and Secretary of Commerce Howard Lutnick, President Donald Trump displays his signed AI initiative in the Oval Office of the White House, Thursday, Dec. 11, 2025, in Washington. (AP Photo/Alex Brandon)
President Donald Trump on Thursday signed an executive order intended to prevent states from enacting their own regulations for artificial intelligence, arguing that a patchwork of state rules could stifle investment and undermine U.S. competitiveness with China.
Lawmakers from both parties, along with civil liberties and consumer-rights groups, have urged stronger oversight of AI, warning that existing protections are inadequate for technology that increasingly shapes consequential decisions in everyday life.
Speaking in the Oval Office, Trump said, "there's only going to be one winner" in the global race to lead artificial intelligence and contrasted that with China, where the central government provides a single channel for approvals. "We have the big investment coming, but if they had to get 50 different approvals from 50 different states, you can forget it because it’s impossible to do," he added.
What the Executive Order Does
- Creates a Justice Department Task Force: The order directs the Attorney General to establish a new task force to identify and challenge state AI laws that the administration views as conflicting with federal policy.
- Commerce Department Review: The Commerce Department is instructed to compile a list of state regulations it deems problematic for innovation or interstate commerce.
- Threatens Funding Restrictions: The order warns that federal funding — including grants from a broadband deployment program and other federal grant programs — could be withheld or restricted for states that enact their own AI laws.
David Sacks, a venture capitalist with extensive AI investments who is advising the administration on cryptocurrency and AI policy, said the White House intends to push back only against "the most onerous examples of state regulation" and would not oppose measures framed as protecting children.
State Activity And Policy Context
According to the International Association of Privacy Professionals, four states — Colorado, California, Utah and Texas — have passed laws that impose some rules on the private-sector use of AI. These laws generally limit the collection of certain personal information and require greater transparency from companies about their AI systems.
Other state initiatives include broader proposals that would require firms to disclose how their systems work and to assess risks of discrimination. States have also adopted narrower measures targeting specific harms, such as bans on deepfakes in elections, prohibitions on using AI to create nonconsensual explicit images, and standards for government use of AI.
Supporters of stronger federal coordination argue a single national approach could protect innovation and make it easier for companies to operate across state lines. Critics say federal preemption risks undermining consumer protections and the ability of states to address harms from biased or opaque AI systems.
