On December 11, President Trump signed an Executive Order on “Ensuring a National Policy Framework for Artificial Intelligence” (the “Order”). The stated policy of the Order is to “sustain and enhance the United States’ global AI dominance through a minimally burdensome national policy framework for AI.” The Order comes amid an accelerating patchwork of state-level AI regulation and reflects a clear federal policy shift toward limiting state experimentation in favor of a uniform, deregulatory national approach. Primarily, the Order establishes a framework for identifying onerous state AI laws, challenging those laws through litigation, restricting funding for states which maintain onerous AI laws, and taking steps to federally preempt such laws. Based on the timelines provided in the Order, this process is expected to begin within the next 30 to 90 days.

State AI Law Evaluation
The Order tasks the Secretary of Commerce with publishing an evaluation of state AI laws within 90 days. The evaluation will specifically identify state AI laws which are onerous and conflict with the Order’s policy. These onerous laws will include those which “require AI models to alter their truthful outputs, or that may compel AI developers or deployers to disclose or report information in a manner that would violate the First Amendment or any other provision of the Constitution.” The evaluation may also identify state AI laws which promote innovation consistent with the Order’s policy.

AI Litigation Task Force
The Order tasks the Attorney General with establishing an AI Litigation Task Force within the next 30 days. The AI Litigation Task Force will challenge state AI laws which are deemed to be onerous by the Secretary of Commerce.

Funding Restrictions
The Secretary of Commerce is tasked with issuing a Policy Notice specifying the conditions under which states may be eligible for remaining funding under the Broadband Equity Access and Deployment program. States with onerous AI laws will no longer be eligible for certain funds under this program.

Additionally, executive departments and agencies will assess discretionary grant programs to determine whether they may condition their grants on (1) states not enacting AI laws which conflict with the Order’s policy, or (2) states entering into a binding agreement with the relevant agency to not enforce any laws which conflict with the Order’s policy.

Federal Preemption of State AI Laws
The Order requires the Chairman of the Federal Communications Commission to determine, within 90 days, whether to adopt a federal reporting and disclosure standard for AI models.

Additionally, within 90 days, the Chairman of the Federal Trade Commission will issue a policy statement on the application of the Federal Trade Commission Act’s prohibition on unfair and deceptive acts or practices to AI models. The policy statement will explain that state laws which require alterations to truthful outputs of AI models are preempted by this prohibition on unfair and deceptive acts or practices.

Further, the Special Advisor for AI and Crypto and the Assistant to the President for Science and Technology are tasked with preparing a recommendation for a uniform federal policy framework for AI that preempts state AI laws. However, state AI laws related to child safety protections, AI compute and data center infrastructure, and state government procurement and use of AI will not be preempted.

Given the provisions discussed above, companies should closely monitor state AI laws and regulations, and anticipate that state regulatory schemes may relax over the next several months. In addition, companies should monitor developments related to Congress, the Federal Communications Commission, and the Federal Trade Commission, with respect to additional federal AI laws and regulations which may be implemented.